THE STRATEGY

THE STRATEGY
Ok now, enough with basics. Let’s get down to the actual
strategy.
Exchange rates of currency pairs fluctuate based on many
criteria, particularly how investors perceive the value should be
based upon news pertaining to the country of origin of the
currency. There are many factors that contribute to the perceived
value of a currency against another, but most importantly are the
“Fundamental Announcements” from that country.
Countries and their currencies being traded on the Forex markets
are like companies and their shares being traded on the stock
market. If a company announces positive news, such as higher
profits in their last quarter, then the stock market immediately
responds by the share price rising. Conversely, if the company
announces negative news such as a loss in their last quarter, then
their stock drops. In much the same way countries regularly
make various announcements of economic importance, and the
value of their currency is also adjusted accordingly against other
currencies.
You don’t have to know what the announcement is or even care
about the news to profit by it with this system. All you need to
know is when such Fundamental Announcements are being
made, and how to profit from it as described in this system. This
is like owning a magical crystal ball to know exactly the
minute when the markets will explode, and how to profit from
it. Regardless of whether the news is considered good or bad,
and regardless of how the value of the currency changes due to
the announcement you will make money. Typically a market
eBook 1 “Amazing FOREX System” - © 2004 Robert Borowski – www.AmazingForexSystem.com
Duplication and distribution of this material is strictly forbidden
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responds by 50 pips to Fundamental Announcements (when it
skyrockets); plenty of room to get profits in.
There are certain websites that publish a calendar of
Fundamental Announcements. You can easily find these for free
on many Forex related websites, and I link to them in the resource
section of my website (see Appendix A).
So the first step is to go to view a Fundamental Announcements
calendar to see what is scheduled to come up for tomorrow
(weekdays, not weekends). Some days will have more
announcements, some days will have less. Generally, the more
announcements the more trading opportunities you will have, and
the more announcements scheduled for a particular country at the
same time the more likely you will see some interesting price
action.
Before we continue you will need to know what your time zone is
in relation to GMT (Greenwich Mean Time), as most
announcements are published according to this time zone.
Where I live is EST (Eastern Standard Time), which is minus 5
hours from GMT, however during the summer I am only minus 4
hours from GMT. Make sure you take into consideration “Daylight
Savings Time” if your time zone changes time in the fall and
spring. You will need this information to adjust GMT time to your
time to know when the announcements will take place from the
perspective of your time zone.
On the calendars you will see a list of countries that are planning
to release announcements, what time the announcement will
happen, and what the announcement is about. Again, you don’t
really care what it will be about, only when and who.
eBook 1 “Amazing FOREX System” - © 2004 Robert Borowski – www.AmazingForexSystem.com
Duplication and distribution of this material is strictly forbidden
12
Let’s say the US is scheduled to release some announcements,
typically 8:30am EST. Then you know the exact time that prices
will skyrocket.
Let’s take a look at a chart to see what happened on a fairly
typical occasion. (See chart 1) This is a 1-minute candlestick
chart of EUR/USD on June 14, 2004. You will notice that before
8:30am the market was just moving slowly along, at 8:30am
prices fluctuated just a few pips, then at 8:31am WHAM! it shot
straight up over 25 pips in one minute and over the course of 15
minutes it went up about 65 pips. After that the market returned
to moving slowly. Had you traded this system at this time you
could have easily walked away with around 40 pips ($400 US
trading one regular lot, $800 trading two lots, $1,200 trading three
lots, you get the idea).
This kind of opportunity happens all the time and is by no means
extraordinary. Often it keeps going even further, and if you
employ some of the advanced strategies offered in this course
then you can sometimes capture over a hundred pips, even
hundreds.
Fundamental Announcements occur at various times of the day
and night, depending on where you live. Pay more attention to
the currencies that make their Fundamental Announcements at a
time convenient for you. If you live in North America pay attention
to the US and Canadian announcements, and then trade
EUR/USD and USD/CAD respectively. US announcements can
be traded against other currencies, the best are EUR, GBP and
CHF. They usually react the same way, but often have larger or
smaller moves (compare chart 2 & 3 as these both happened at
the same time, however you would have made an extra 20 to 30
pips trading GBP over EUR). If you live in the Asian regions
eBook 1 “Amazing FOREX System” - © 2004 Robert Borowski – www.AmazingForexSystem.com
Duplication and distribution of this material is strictly forbidden
13
including Australia & New Zealand then pay more attention to
those currencies (JPY, AUD, NZD) traded against the USD, and
even against each other. If you are lucky to live in Europe then
you benefit from being awake during most Fundamental
Announcement times, and can trade just about anything.
Sometimes major news events can cause major price moves, but
don’t worry about these, as they are unpredictable and very
difficult to profit from since by the time you find out about the
news it’s already too late.