How to analyse Qualitative events (How to analyse Fundamental events Part 3)

Hello and welcome once again. In this edition, I'll be sharing with us how to trade qualitative events, or I will be sharing with us how I have been trading qualitative events so that you can also get to do it the same way I've been doing it and get good results from the market. Um, on this particular day which we are going to be using, it's a monetary policy assessment From the Swiss National Bank. So on this particular day, the Swiss National Bank decided to increase their policy rate from -0.25% to 0.50%. That was pretty, pretty, pretty massive— a 75 basis point increase in policy rate by the Swiss National Bank. For those of us who've been following what has been happening globally at this point in time, we all could notice that inflation is soaring higher and higher by the day. And with the rate at which inflation is rising, central banks can no longer fold their hands. And a lot of them have been very aggressive in their meetings. We've seen them increasing or hiking rates 50 basis points, 75 basis points, and pretty soon there are expectations that some of them might even be first to a 100 basis point rise in interest rates. Yeah, this part of policy rate, interest rate, bank rates are quantitative. But there are some other parts of these events that are more influential in the market that determines if the move we are going to see as a result of the policy rates, either increase or decrease, is going to really affect the market. Um, so on this particular day, very early in the morning, around 8:30 AM according to my own time, Where I am speaking from, the Swiss National Bank also released their monetary policy assessment. This particular event, the monetary policy assessments, just like the press conference and the monetary policy statements that was released from the Bank of Japan earlier in the day, is not quantitative. Because if you check, the actual column is blank, the forecast column is blank, the previous column is also very blank. So how will we know if the policy assessment would lead to a buy or a sell on an instrument that will trade, especially the instrument that has a direct bearing on the currency of the central bank? Because this particular strategy I'm going to share with us today works more on a particular currency because Uh, most of, uh, these qualitative events, most of them— I'm not saying all of them because we also have OPEC meetings. OPEC meetings sometimes are also qualitative, and we also get to understand, or we also need to get to understand, uh, the stand of OPEC. What are they planning to do? What is their view about the oil market and the likes of them? That would give us an insight if they're expected to be buying oil or selling oil during the course of the month. That's also qualitative, reasonably. But I'll be focusing more on the central bank policies, policy statements, and their press conferences. How do you get to treat them? Especially something like the monetary policy assessment from the Swiss National Bank or the FOMC minutes, um, by the Fed, something like that. How do we get to trade it? And the usual way I trade the monetary policy assessments or policy summary from central banks is to allow the first 2 minutes volatility in the market to be settled. There is this usual occurrence in the market whenever central banks are having their policy assessment or their policy summary or their minutes. That the volatility in the market at that time usually moves in both directions. What do I mean by that? If the policy assessment is expected based on we analyzing what the policy assessment is pointing to ought to push the market to the downside, you might first notice that the market will move first to the upside before coming to the downside. So it gives a dual movement. It moves up, then it comes down within a very short period. Um, so there is a strategy I use to trade both sides. Yeah, it's possible to make money from both sides. You can also do that. I'll also be sharing that with us. And there's another way I trade the market in case I do not want to take a huge risk, which is going to be involved if I'm planning to trade both sides. I just want to be very sure which side of the divide will this policy assessment move the market to. And when I get the direction, I go in with it and I watch my profits grow. So let me start with the first way. How do I take advantage of policy assessments like this in case I want to trade both directions? Okay, since I know most of the time the market tends to move up and move down within 1 or 2 minutes of the release of policy assessments or policy summary or minutes of central banks. So let me quickly get my notepad up, then I will show us how to go about this. Okay. In case of trading both direction, since I know volatility will push the market up then return it to the downside within a few minutes, I can do this. Few minutes, let me say 1 minute to the release of the policy assessment, 1 minute to the release of policy assessment, I will take a buy. That's an instant buy. And add a take profit of 10 pips, 10 pips to the trade. I take an instant buy, put a take profit of 10 pips, and at the same time I take a sell trade and add a TP of 10 pips, 1 minute to the release of the The minutes, the statements, or the speech, I take buy and sell with 10 pips profit each on both sides. More than 80% of the time, I get to see the trade touch the TP at both ends because the volatility usually swings up or swings down first and then swing up, or swings in both directions. When policy meetings like these are released. So this is one way we too can do this. We can also copy a system like this, uh, though this has a tiny bit of risk because there is a possibility price might not get to the TP of one of the two before swinging back to the other side. That is also possible. So this is a bit risky compared, um, to the other one I'm going to be sharing with us, which which is we ascertain the direction the market is going to take before we take our trade. But with we taking trades even before the event is eventually released, we can also do what I call setting pending orders. We can also set pending orders ahead of the release of the minutes, the statements, and the likes of them. So if you want to use pending orders, I will encourage us to set minimum of 20 pips gap between the current market price and our pending order zones. And in this instance, you do a buy stop and a sell stop. So you do a buy stop and sell stop with 20 pips gap between current market price and your entry prices for the buy stop and for the sell stop. I would also advise us to set these pending orders at about 2 minutes to the release of the statement or the minutes. In this case, or in this instance, we'll be able to minimize the possibility of price getting to touch the 2 sides before picking a particular direction. So if you set a 20-pip gap between current market price and your potential entry price, I would also suggest that you do not include a take profit because recently, especially due to the rising inflation across the globe, we've seen policy statements by central banks giving us a huge number of pips. And if you've added a TP to your trade setup, you are already limiting the kind of profit you can make, um, in the market, which is not the best for us. So I would encourage us, I would advise that we do not add a TP, uh, just take your— place your trade this way, get to see which of the 2 sides price is going to move to or swing to, then follow that particular direction. Exit your trade when your profit starts dropping. Simple as that. This one, we trade ahead of the release of the data. You can do this, and it's something I would encourage us to test first. Let's test this way. Let's see if it works. So if it does, I will be waiting for our, um, feedback in the comment section. Let me get our feedback on this method. If you use it, does it work? And how much are you able to make from it. Not necessarily the profits, you can share the number of pips you're able to make using this method. The final way I use is ascertaining the direction before I join. This has worked 100% of the time that I have tried it. So I would also encourage us to work with something like this too, because it works every single time that I have tried it. How do I do this? What I usually do is that I will pick an instrument that I am expecting a higher volatility on, based on the expected qualitative data, meaning statements or speeches. I open the charts and I observe. The first 1 minute, I try to identify the direction the market is swinging to. Say for example, Immediately the minute the statement is released, market moves up. I take note, I do not join yet. I observe what happens at the second minute. The second minute is very, very crucial because it is the second minute that will tell me definitely if I should take a trade or I still need to exercise some patience. In case the second minute also moves up, but the first minute moved up. In case the second minute also moves to the upside, by the third minute I will take my buy. This is very, very possible. I have the first minute market moves to the upside, the second minute market moves to the upside. By the third minute, I take my buy trade. So this is a way we can trade the one that swings in a particular direction pretty fast. But there is still a twist to this. There's a possibility that at the first minute, market moves down. The second minute, market moves up. So this is very, very dicey looking at it. Down first, up the next one. And this is very, very common when it comes to statements. Market moves in 2 different directions in the first 2 minutes. And in this case, the 3rd minute is very, very important. In case the 3rd minute moves up, definitely at the 4th minute I can take my buy. So I use the first minute to first um, get to see the direction the market is moving to. I use the second minute to confirm, is the price still swinging in that same direction? And then the fourth minute to ascertain if I can enter a trade or I cannot. If by the third minute market still moves down, this definitely tells me that that particular event is not tradable. So I am going to stay out of that particular event. But But if it works according to this template I have here, then I join my buy at the 4th minute. And the good thing about statements is that they give good returns when it comes to the movement, uh, the pips movements on those instruments. So thank you, thank you for being a part of this edition. If you have any question on what I've shared here, I'll also be waiting for us in the comment section. Drop your comments, drop your questions. And definitely we are going to get our responses as soon as possible. Thank you. Let's subscribe. Let's like this video so that more content that would be beneficial to us like this will also be made available. Thank you. Thank you. So I look forward to having you around pretty, pretty soon. Thank you.