3 - Blueprint for Post Announcement Trading Blueprint.pdf · 2020-05-08 · This type of scalping...

Welcome to a high-profit scalping strategy called Post-Announcement tradingor ‘PA’ scalping for short.

PA scalping is not in the least sophisticated so it’s important not to overthink it.It’s about trading in a 10 minute chart. It’s about dipping in and out of themarket quickly when there is a move to dip into - and that means grabbingpips and getting the heck out of there…

Once we have entered, if that trade does not go our way, we do not linger inany way, for any reason, and for any time. That’s the rule before we start.

If we enter because we see it moving - and it doesn’t keep moving - we exit in aflash. Even against your ‘feelings’ and your ‘instincts’ - if it hesitates - if it’s notgoing forwards - we exit.

I’m saying now because it’s a first principle.

We trade the moves, we don’t fall in love and marrythem.

That’s our EXIT RULE…

Let’s elaborate a little on the moves we do trade.

Metaphorically speaking, we aren’t rolling the dicerandomly every time we enter a trade just ‘hoping’ thatprice would go our way. That would be like putting yourmoney on red in a game of roulette - it could go eitherway - a pure chance…

PA scalping is all about trading in EXPECTATION of a movement which wehave good reason to believe will happen.

That’s actually what this is all about.

It’s based on having a trading ‘edge’ and cuttingdown the ‘margin-for-error’ because we havereason to expect movements. And themovements we expect are caused by somethingcalled ‘Financial Announcements.’

Financial AnnouncementsThere over 40 relevant financial announcementsevery month. They are issued by governmentaland financial authorities around the world.

They are reports on various different aspects of acountry’s financial health, wealth, or lack of it - andeach is strictly scheduled and timetabled to repeatat specific times throughout the month and year.

3 - Blueprint for Post Announcement Trading

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There are no guarantees, but many of these announcements can have analmost instant effect and force price to move up or down within seconds,maybe minutes.

Of course, if the market ALWAYS moved in response to an announcement itwould all be too easy and we’d all be millionaires, unfortunately many of themdon’t move the market at all.

And - please note this point - we can never tell. What might not move themarket one month may cause a great move the next month.

However, more than enough do move the market, and there are quite a fewprofessional traders who do nothing else but trade these announcements.

This type of scalping was, very successfully, our only trading strategy forseveral years.

We only stopped using it in April 2018 because of changes in the leveragelaws in the EU and UK.

Lists of announcement-times, called ‘Forex Calendars’ are freely available. Sowe can plan the week ahead in advance if we choose, and be ready to trade atspecific times and dates every month.

All we need is access to the calendars, and we can arrange to be waiting atany of those times that suit our personal timetable. We can get access tothese online schedules in several ways, and we should check at least twobecause there can be discrepancies.

Our two most frequently used lists are at:

1. www.fxstreet.com/economic-calendar

2. www.forexfactory.com/calendar.php

And here’s a video to explain how we use these calendars…

https://forex4training.com/course/19/15cal.mp4

As you might expect, it isn’t quite as easy as simply turning upfor an announcement, and then clicking ‘submit’ to take a tradein the hope that pips will just fall into your net.

Frequently, but not always, because of the risk of insider trading,when the announcement could be of dramatic financialimportance, all brokers can choose to widen the spreads for a fewseconds or less at announcement times.

Because of this, I want to make something very clear. We do nottrade the actual announcement release.



We trade AFTER the actual announcement.

If the spread widens, we wait, until it has all butreturned to almost normal for the sake of safety ofcapital.

Consider, if the announcement is high-impact, and youentered a trade with a 10 pip stop, you would almostautomatically be stopped out if the spread widened to15. We can’t have that scenario.

So I’ll repeat: we don’t trade the announcement…

We trade the residual movement AFTER the announcement.

And I want to remind you that because we have such a brilliant money-management strategy, unlike ANY other traders, WE can make great returnsfrom tiny pips.

Even fractions of pips add up at the end of a week or month to the kind ofreturns that can’t be matched anywhere.

Therefore, we don’t need to do anything but catch the safe tail-end of the high-impact announcements - and even small moves, where the spread does notwiden with the lower-impact announcements, are frequent money-makers forus.

This kind of trading is ALL about, fast in - fast out.

There IS a challenge in that manyannouncements don’t move the market.

Even though we are sitting there waiting, thereare going to be plenty of times when it doesn’tmove. (That’s where a clever combination ofdifferent scalping strategies can pay dividends).

But I’ll repeat that this is a very succesfulstand-alone money-maker, make no mistake.

However, as you already know, with our multi-chart set-up, the good news is that we cantrade more than one scalping strategy from thesame charts.

Later, as we include other scalp strategies,you’ll see that we can set up specifically forannouncements and whilst doing that - before,during and afterwards - spot a London open

scalp or a divergence scalp and take full-advantage of it because we are set-up and ready for anything that comes along...



Timing

Sometimes the announcemnt has an immediate effect and a moveshoots into play, sometimes if takes a number of seconds andsometimes many minutes before there is any kind of reaction.There is no rule of thumb.

The high impact releases usually move the market quickly - just beaware that moves happen quite randomly.

The thing to keep in the back of your mind all the time is thetrader’s understanding of the returns from just a few pips

Even a few decent moves a month can produce fabulous returns. Mentalcontrol here is just as impornat as an ability to get in and out quickly ;-)

But talk and words are cheap. With trading forex, more than any other subject Iknow, ‘doing it’ and making mistakes is the fastest - NO - the only way tobecome good at it.

Risk-To-Reward RatioNow - I can’t repeat this often enough - your familiarity with the process willdetermine your success level - and that familiarity, hinges on practising it.

The more familiar you are with the physical processes, the more yourbrain will have the time & space to think about the move you are trading...

This is so important that I have always insisted that new people practice fastentries and exits on a daily basis until they become profficient at it.

And I do want you to carry out that kind of practising too. This is about havingan acceptable “risk-to-reward ratio” whenever you trade.

I’m going to explain this now, on the premise that it’s much better if youunderstand ‘why’ you are asked to do things that may go against the grain(meaning that you don’t quite see why you should).

Apart from the obvious fact that our negative trades MUST be smaller than outpositive trades or we’ll go broke very quickly - there’s another reason which iskind-of behind that thinking.

I can tell you from over a decade of data, that our average negative trade fromthousands of trades, is -1.46 pips. What I really want from you, before you stopthe daily practice sessions I’m about to explain, is an average of -1.7%. I knowthat’s achievable.

Here’s why…

v



Using a maximum of a 10 pip stop for scalping. Let’s look at the money-management workings of how we arrive at a price per pip for trading.

In essence (but not precisely) we divide 2% of our capital by the stop, to arriveat a price per pip. So the value of one pip will be exactly one/tenth of our 2%,right?

So, if we didn’t have an exit rule, we would sometimes findourselves stopped out for the whole 10 pips, which wouldmean a loss of 2% of capital.

So, without an exit rule our risk-to-reward ratio, per trade,would be the whole 2%.

But WITH an exit rule, and practice of at-speed, entriesand exits, the average negative I am asking from you is -1.7 pips.

From this it follows that if 1 pip is equal to one tenth of 2%(which is 0.02%). Then 1.7 pips is equal to (1.7 x 0.02%)0.34% of capital.

In other words, our average risk-to-reward per trade - will be 0.34% of capital -NOT the 2% some people think it is.

THAT’S why practising and becoming so familiar with the process is crucial.

Having a very low risk-to-reward ratio contributes greatly to preserving ourcapital and making sure that our ‘costs’ are always smaller than our ‘profits.’

Fast In and Out Practice Regime.There are examples of practice routines on thenext page.

I don’t need you to report these figures to meany more. You need to do it for yourselves.

This should form the basis for your homeworkevery day until you can consistently achieve anaverage negative of -1.7 pips.

That does not mean that you have to do thiskind of practice regime at the expense of realPA demo-trading.

It can be done AS WELL as PA demo tradingand sending in reports for help and commentsas you go forward (more on that in a moment).



Again, the benefits of practising can’t be over-emphasised. And it does mean sitting down and workingout a disciplined schedule for yourself. One that allowsyou to…

1. Attend scheduled announcements and set-upyour charts for trading as you were shown.

2. Wait for the spread to return to normal if itexpands - and start to practice entries and exits -

that's getting in and out of trades as fast as you can.

3. If the spread doesn’t expand, start your practice right away.

4. Don’t worry about the pips. Practice the mechanical and physicalactions of entering and exiting as fast as you can.

Once again, the object of the exercise is simply to imbue your brain with theability to enter and exit trades mechanically and without conscious thought.

Please understand that any time you have to spend thinking about themechanical processes, is time wasted. Practice doing it until you reallyDON’T have to think about it.

Don’t try to get positive trades. This is where you have to dig deep to findpatience, discipline and TRUST…

I repeat: you need to become so familiar with manipulating themouse and the platform that you don't even have to think aboutwhat you are doing.

It needs to become automatic and absolutely second-nature that you can enter and exit in the blink of an eye.

So - practice setting up your monitor for scalping and thentake multiple entries and exits during each PA session. Andthen do it all over again, repeatedly…

For your own benefit - list each trade, rounding to onedecimal place as you will see in the following examples.Then total up each day’s results and divide that result bythe number of trades taken that day.

Like this: -2. -4, -6, -1.2, -1.5, -5, -2, -1.5, -1.3, -4 (Don’tinclude any positives, they’ll be rare and don’t count)

In the example above, we took 10 trades during theannouncement, a total of -28.5 pips. 28.5 divided by 10 = 2.8

Practice regime



So over this announcement we averaged a -2.8 pips exit-time.

This is getting there, but not good enough, and you can see that anything over-3 really skews the results.

For these homework sessions you should only pick currency-pairs withspreads of 3 pips or under.

Your aim is to get down to a consistent average of -1.7.

At first this will be tough, but bear in mind that you are simply learning atechnique that will help make you into an awesome, capable trader.

And it’s worth remembering that if others can do this - so can you. The prize ismore than worth the effort.

Please also understand that as you become more and more familiar with this,several things will happen that you may be unaware of right now.

Obvious Benefits . . .

1. When you become adept at this, you will be able to focus on the traderather than the distraction of mouse and the eye-work which spoilsconcentration. Doing these things automatically and mechanically meansthey will become second nature.

2. You won't have the same adrenaline rush when thinking about enteringand exiting trades (which we all get in the beginning) because - onceagain, it will be second-nature to you and you'll be familiar with it, so you'llbe more relaxed and as suave as a bucket of custard.

3. Your decisiveness will be enhanced, because what will happen is thatyou will gradually become consciously and subconsciously aware that ifthe trade isn't any good, you are able to get out so quickly that you can'tdamage yourself.

This is all about having the confidence to get in - knowing that you canget out.

Here’s an example from a while ago when people were asked to sendthese in. It was from Russ, attending two announcements on this

day:

Hi Sid,

Here are my practice results for today.

3.30pm USD/JPY -1.9, -3.1, -2.2, -2.1, -2.1, -1.8, -3.5, -1.9, -1.8, -1.3,5.00pm USD/CAD -1.9, -1.6, -2, -2.4, -1.9, -2, -1.9, -3.4, -2.1, -1.8,

Total -43.7 divided by 20 = average -2.18

At this time, Russ was not as practised or experienced as Chris who alsopractised on three announcements on the same day.



Hi Sid,

See today’s practising below.

1.30pm USD/GBP -1, -1, -1, -1, -1, -1, 0, -1, 0, -1, -1.5 = -9.5 from 11 trades3.30pm USD/JPY (+2, +1) -1, -2, -2, -2, -2, -1, -1, -1 = -12 from 8 trades4.15pm Speech -2, -2, -2, 0, -2, -2, -2, -2, -2, -2 = -18 from 10 trades

Total -39.5 divided by 29 average = -1.4 (Not inc. positives)

This is very acceptable and the result of lots of practice and it’s very clear tosee that Chris is ready to trade properly in demo. It’s very important to startthis right away. Once done and dusted it will serve for all strategies from nowon and you’ll never have to go through this again.

This practice is a personal effort. We don’t need to see your results so pleasedon’t send them in…

And just as a thought - doesn’t this remind you of Rhonda’s figures inFebruary, all tiny gains? In and out in a flash…

Selecting pairs for practising

If there is a financial announcement from the United States, how would youpick the currency pairs to set-up?

Of course, you would pick any pairs with the US Dollar in them - that’s prettylogical. So from all the pairs, you could pick, the USD/JPY the GBP/USD andthe USD/CHF - just as one example…

These charts are the ‘tools’ you would work with…

If the announcement was from the UK, you would pick pairs that contained theGBP.

If it was Germany, you would pick pairs that contained the EUR and so on.

Remember, only choose pairs with spreads of 3 pips or under for practising.

Our trading is ALL about the exit rule. Perfecting your skill isundoubtedly the way to become an awesome trader.

NOTE: There’s one announcement you should stay away fromaltogether. In fact, you should stay away for at least an hour beforeand an hour after.

This announcement can be so volatile that it sometimes whips morethan 100 pips up and down in an instant. It is usually published inthe US on the first Friday of the month and it’s called Non-FarmEmployment Change or on some calendars, Non-Farm- Payroll.

Do not trade this announcement. It is always timed at 08.30 eastern timewhich is 13.30 UK time. (If the first Friday is very close to the 1st of the month,the announcement transfers to the second Friday)



Reporting demo PA tradesIf you are already capable of fast exits as described, or indeed as soon as youbecome capable, you should send in your trades for review, comment, helpand advice.

I can honestly say this is a crucial step. I have met less that a handful ofpeople in 15 years of training, that didn’t benefit from help and advice.

There is nothing worse than unwittingly developing a bad habit and then tryingto build a future on top of it. It just doesn’t work.

So everyone needs to submit their trade report and a screenshot for everytrade (please try and don’t send more than one report at a time).

It is very easy to do with our new ‘Report Form’ system.

In the beginning I want you to select ‘Target Practice’ from the form options(you’ll see when you get there).

These reports will not go into the experienced section of the bulletin and theheading of ‘Target Practice’ means that it will be files in a place whereeveryone makes mistakes and is learning.

As you get better and better - not necessarily a good trader but morecompetent - I will suggest that you move up a level and explain how.

For now, follow this link for the report selection form, and select ‘TargetPractice.’ It’s all very self explanatory.

Link to Reports: https://is.gd/X62zDq

You’ll also find this link at Section 8 in the forum.

Screenshots

At the bottom of the report, you’ll be able to upload your screenshot.

Please provide screenshot files in .jpg format.

Screenshot width for scalp trades should be around 300 pixels and shouldshow around 20 to 23 candles just as you see in the multi-chart set-upvideo.

If in any doubt, take a look at scalping screenshots posted in the bulletin. Mal,or Rhonda would both be good examples to copy from…



NuancesTrading successfully is all about learned experience from doing it.And it is almost impossible to note every nuance of PA scalping here. We allbuild knowledge from doing it - plus other peoples’ experiences set-out in thebulletin every day - and our weekly meetings.

But there are two nuances to PA scalping that I want to mention here. Andplease understand, these are not in any way ‘tutorials’ - but are both a part ofthe PA scalping blueprint that you should be aware of.

Correlation.Correlation is where the movement or price action between two or more chartsis similar. It correlates. Our three-chart set-up is perfect for this.

I’ll give one brief example to illustrate this, but once you understand theprinciple and are aware enough to look for other examples it can greatlyenhance your trading.

Lets’ suppose we are waiting for GBP announcement, We have three chartsopen - GBP/USD, GBP/JPY and the USD/JPY so that we have a goodoverview of the GBP and the others majors that often react to announcementsin the pound.

We see the GBP/USD react first, not in a big way, but it starts to rise.

Then the GBP/JPY follows. And happens again - the pound moves a little andthe GBP/JPY follows.

This is easy to understand and could help in two ways.

1. You may be ready for the next GBP/USD move, confident that thecorrelation with the other pair confirms that this is a genuine move andnot a single abberation.

2. you may decide to wait for the GBP/USD to move, and, knowing nowthat the GBP/JPY seems to follow but lag a little behind, wait and tradethe follower - well prepared by the move in the GBP/USD first.

Now - I am aware that this is just the ‘idea’ of correlation - but I am merelymaking you aware of this nuance so that you can look-out for and develop yourown knowledge base. Be aware also that you can often pick up other tips fromthe reports in the bulletin.

About WicksLook at any chart and you will see that over 90% of candles have wicks at thetop and the bottom.

These wicks show you that before a candle closes, it usually retraces a littleand leaves a wick behind before the next candle opens.



Now let’s picture two such candles.

Imagine we are looking at two green candles and both have wicks top andbottom.

Picture the first candle coming to it’s end at the allotted time. It is a rising greencandle. It retraces just before closing and leaves a wick at the top.

Immediately it closes at the top of the solid green body under the wick and thenext candle opens alongside.

It opens and immediately, turns red and goes down a little.

It is continuing the direction of the retracement of the previous candle,maybe for just a moment after it opens.

Then, that red beginning-of-a-candle itself retraces, moves up, and leaves awick at the bottom. It passes the opening point (the top of the green body onit’s left) and continues the move up as a green candle with a wick at thebottom.

What we have then, is candle #1 with a retracement before it close leaving awick at the top - leading into a continuation of the retracement move - themoving up and leaving a wick at the bottom of the next candle.

THAT’S why there is are invariably two wicks at the top and bottom of mostcandles.

Because of that - historically - we did not trade the first and last minute and ahalf of the 10 minute candles in PA scalp charts.

Understand that this was not to get more positive pips - but to get far fewernegative ones ;-)

Which Candles To Trade PA

There is a kind of anomaly to take advantage of that can happen ‘Inexpectation’ of the announcement.

There is sometimes a move in the candle preceding the announcement.This ‘anticipatory’ move is often supported by correlation with other pairs.

Often, this can be a worthwhile, tradeable move, even though theannouncement has not actually happened yet. If the move is strong, andespecially if supported by correlating pairs, it is perfectly acceptable to tradethis pre-announcement candle.

As a general rule - it is acceptable to trade the 10 minute candle before anannouncement - and the two 10 minute candles following the announcement.

After that, it is rather doubtful if the influence of the announcement is still valid.

Final Word

If forex trading was easy, you and I would be bumping into forex-millionairesevery time we walked down the street. I never yet bumped into even one…

Very few of the lessons we have learned in life that we now take for granted,apply in trading.

It is NOT easy for anyone who believes the way they think and have beenconditioned to think, will apply to forex trading. We have all beenconditioned a certain way, and we don’t step outside that way of thinking.It’s what we know. It’s a case of - MY way or the highway…

It makes learning trading hard. It’s called ‘tunnel thinking.’

Forex only BECOMES easy - if your expectations are tailored to a morelateral way of thinking. It’s the lateral thinking that is not easy.

It’s just NOT - because it goes against your life-conditioning and what youbelieve in.

We are conditioned into thinking the only way to earn a living is to get paidevery month or every week. That’s how we measure things.

Forex is different and you MUST get used to thinking in ‘averages’ andmeaningful projections, not ‘this week’ or ‘this month.’

I have attempted in this new start training, to get this across to you from thestart.

Just 2 or 3 pips a week, means an ROI of 30% p.a.

But you may do 1 pip this week, 12 the next. This ‘uncertainty’ about a ‘regular’weekly wage kills enthusiasm for many people.

You DO need to consider that your ‘highway’ may only be a side street at best -and a cul-de-sac’ at worst.

There are an awful lot of people living in cul-de-sacs…

3 - Blueprint for Post Announcement Trading Blueprint.pdf · 2020-05-08 · This type of scalping...

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Transcript of 3 - Blueprint for Post Announcement Trading Blueprint.pdf · 2020-05-08 · This type of scalping...