Trade Example: How To Trade ECB Member Comments


In this video, we are gonna
look at another trade example to show you how Forex
Source helps you generate really high probability trading ideas on a weekly basis. This latest example was
from the 15th of August. It occurred at 14:45 in
the sentiment stream, but the audio score came at around 14:44, it’s always (mumbles)
a couple minutes before the analysts have time to actually write it was the headline. You can see all the
information you need to see is in this headline here
where ECB, Olli Rehn basically said the ECB
needs to have a significant and impactful easing package in September. And it’s better to
overshoot than to undershoot in stimulus. Basically, it’s better to be more dovish than not quite dovish enough with that easing methods. Now, this is market moving,
because you can see the analysis here, Olli Rehn is considered
a neutral board member at the ECB. Those comments are decidedly more dovish than his usual rhetoric. Now, you might be thinking
well, how do I know whether or not each ECB member’s comments are in line with their
normal rhetoric or not. Well, if we go into the
Forex Source terminal in the Currency Research section, we actually have our
central bank cheat sheets and on the cheat sheet, we
give you all the members of each bank, their position
and crucially, their stance. Every member that’s in the
bank, you’ll be able to see whether they’re a dove, a hawk or neutral and you’ll be able to
see their recent comments which we update regularly. If you got to Olli Rehn,
at the bottom here, you can see, is the
governor is from Finland. Now, he’s normally neutral
so he’s not particularly in favor of dovish
action or hawkish action but his last comments
were basically saying that we need to forget about rate hikes and we need to think more
about whether the stimulus is appropriate. So, he’s kinda started
leaning to a dovish angle but by no means was he a dove. He’s still quite neutral. If you look at the voting schedule here, you can see his comments here are relevant because on the 9th of
September, he’s actually a voter in this round of ECB decision-making. So if you go back to here,
suddenly, if you’re aware of what’s going on, Olli Rehn’s comments being quite dovish are irrelevant. They’re gonna be market-moving. So if we go to the chart
now, and take a look, you can see that we had,
the comments came out here. Well, you can see here
this is a one-minute chart by the way, the comment was released here, we got an immediate
reaction in the price chart and you can see there’s
probably about three or four minutes, maybe
four or five minutes, of where you can kind of
digest this information, double-check what Olli Rehn’s position is, whether it’s relevant to the market, and then you could make a
decision, yeah, actually, he is neutral normally, and
these comments (mumbles) are dovish and he’s a voter
so he’s gonna have influence on the board. This is gonna be market-moving. You could (mumbles) roundabout 11131, as you can see the time
is about 14:42, 14:43, so these comments are
just fresh coming out and if you go to a higher
timeframe to have a look at how this plays out, you can
see that these comments here, there’s the level, one
out of 31, and the price dropped over 50 pips, all
the way down to the 110s and this is a fantastic
opportunity to trade a shift in sentiment because ECB
meeting in September. This is an aggravation. Obviously, we’re expecting
the ECB to do something. We’re expecting them to ease. But this is an aggravation. So what this did is it
kinda made, oh, actually, maybe the ECB are gonna do more easing, maybe instead of a simple cut, maybe they’re gonna do more. Maybe they’re gonna do more Q.E., maybe they’re gonna add a broader
range of stimulus measures and hence, the Euro fell off. This is a classic example
of a sentiment shift but this time it’s in the direction of the current sentiment. It’s an aggravation of
the current sentiment. It makes it more pronounced,
and these are the kind of moves that you get from those things. If you’re wondering how
something like Forex Source’s gonna help you make
money, these little events happen on a regular basis every week and this is your opportunity
where you wanna jump in and hype easy pips because these are the high-probability
trading opportunities. I hope that helps and we’ll be back soon with some more trading ideas and trade generations that
are specifically created through breaking news
and sentiment shifts.

One thought on “Trade Example: How To Trade ECB Member Comments”

  1. I was in forex source.. I am about to join your education programme. But you shud include more upcoming news and rumors like streetinsider. Com

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