How to trade an economic event with the FNA autoclicker

Let’s get into the heart of the subject. We will see here the strategy to adopt when trading an economic announcement with FNA. I suggest you touch on the important points that will help you optimize your trades. For the operation of the FNA autoclicker itself, please see this article.

To understand this article, it is best to have read beforehand: “How to use an economic calendar“.

Here are the key points of this strategy :

 

The difference between the current value and the forecast value: the surprise :

The data that will interest us in the strategy of trading economic announcements with FNA are:

• Data in the forecast values ​​column
• The data in the column of current values

The theory: when the current value is published, the market will compare the latter with the forecast value. If there is a difference between the two, then we speak of surprise. It is this surprise that will react the market and therefore move the price of the asset.

There are therefore three possible situations when the current value is published.

We will take the example of the publication of the ISM manufacturing index, which is one of the major indicators of the American economy, and of EUR / USD to measure the impact of this announcement on the dollar. Take the consensus of 50 for this example.

• The current value is equal to the forecast value :

At the time of publication, the current value displayed is 50. The market is already expecting this value, the surprise is zero, there is therefore little movement in the price of EUR / USD.

This is why when setting the click trigger intervals, we will automatically exclude the value of the consensus.

 

• The current value is greater than the forecast value :

At the time of publication, the current value is 52. There is then a positive surprise effect because there is a positive offset/surprise between the current value and the forecast value. The consensus having been “mistaken”, the market will seek to integrate the current value and the price of the asset in question will theoretically increase.

In our example, the value of the dollar will therefore appreciate and therefore the EUR / USD pair will fall.

 

• The current value is lower than the forecast value:

At the time of publication, the current value is 48. There is then a negative surprise effect, since there is a negative difference between the current value and the forecast value. The consensus having been “mistaken”, the market will seek to integrate the current value and the price of the asset in question will decrease in theory.

In our example, the value of the dollar will therefore decrease and therefore the EUR / USD pair will increase.

Precision:

I also add that the larger the difference between these two key values, the more we can expect a sudden adjustment in the asset price and therefore a greater potential gain. We can therefore choose trigger intervals that deviate from the value of the consensus in order to hope for a greater market reaction, and therefore stronger price movements. However, doing this increases the probability that the current value may fall outside of the trigger intervals and therefore that FNA will not simulate any clicks.

 

The right economic calendar :

As we saw in this article: “How to use an economic calendar“, the calendar provides the publication of economic data from many countries.

However, there are many and not all offer the same things. The differences relate in particular to:

• Consensus or forecast values :

Most of the time, you will find the same consensus, but there can sometimes be differences. This is why I recommend consulting several economic calendars to verify that all of them display the same forecast value. This is essential in determining which values ​​of the current value will surprise the market.

If you notice differences you can simply avoid playing the announcement or exclude the interval between the two proposed consensuses to be in agreement with the two expected values.

Example : let’s take the US GDP event and the USD / JPY pair.

Investing.com indicates a consensus of 10% and DailyFR.com indicates 11%.

In this case, you can define the following trigger intervals :

• • For the SALE click: [-100; 9.9]. This means that if the current value displayed by the calendar falls between -100 and 9.9, FNA will simulate the sales click.
  • For the PURCHASE click: [11,1; 100]. This means that if the current value displayed by the calendar falls between 11.1 and 100, FNA will simulate the purchase click.

If the current value falls between 9.9 and 11.1, FNA will not simulate any clicks.

 

• The exhaustiveness of the proposed events :

All calendars all have the same number of major economic events. However, some offer more ads but they will be less watched by the market.

If you want to trade exotic pairs, it can still be interesting! You can find a presentation of the best economic calendars here (to come).

 

Events and assets to trade :

Theoretically, I would say that almost all of the economic events on the economic calendar can be played with the FNA autoclicker. As long as there is a current value, we can configure FNA to take a position. However I advise to play only the announcements:

• whose expected volatility is medium or high. (see this article) (coming soon)
• which have a forecast / consensus value.

We can trade economic announcements with low expected volatility if we set intervals further from the consensus and thus eliminate the weakest surprises.

Regarding the assets to choose, I recommend those most traded by the market to benefit from stronger price movements.

For example, if we want to trade the number of unemployment in the US, we will choose EUR / USD rather than AUD / USD.

 

The right financial product and the right broker :

The Sapin 2 law (frenh law) no longer allows me to promote certain financial products, or brokers. So it’s up to you to do your research to find the best financial product for this strategy. You will have to pay attention to certain elements such as:

• spreads
• risks to your capital
• speed of execution of orders
• etc.

 

The limits of this strategy :

• Close position :

The first limitation is that this strategy is only used to open positions. However, you will have to close it yourself!

Advice: you must have planned your closure strategy before launching FNA. I discuss these possible strategies in this article. (to come up)

 

• Late calendar :

It may happen that the publication arrives late compared to the scheduled time.

• • If this delay is suffered by the whole market, there is no problem. It is quite common for releases to be delayed due to the agency responsible for reporting statistics. As long as you get the information at the same time as the other traders, you can continue monitoring the announce.
  • On the other hand, if you notice that the market has reacted frankly in one direction while you are still waiting for the result of the announcement, I advise you to stop the FNA autoclicker immediately. It is essential to open the position at the same time as the market to avoid doing so when the movement falters, or even when the price reverses.

I would add that an announcement can arrive too early, which is why it is useful to launch FNA well before the announced time of the announcement.

Tip: Launch FNA and configure it before the release time and stop FNA urgently if you get the statistics after the market.

 

Several announcements at the same time :

It’s common for more than one ad to be published at the same time, and even to be made by different countries. This poses a big problem because these published statistics can have opposite effects on the market price. This makes it more difficult to configure FNA.

Advice: try to look in the past (see this article) (to come) if this ad configuration has already taken place to see which ads have dominated the others.

 

Unexpected market reaction :

Even if your strategy was good at the start, the market can react unexpectedly and prices can go in the opposite direction to what you had initially planned.

Advice :

• • look at the history of the ads and how they have affected the assets you want to trade (see this article) (coming soon)

There are other possible strategies to play the economic announcements, I approach them in the following article: “The other strategies to trade the economic announcements” (to come)

 

Trading is a risky activity and can lead to the total loss of your initial capital (and sometimes beyond)