Okay, so in this video, I'm going to talk you through my planning for taking a potential trade this morning on the 14th of July 2015. It's a big, big day for the pound. Why is that? Well, let's go across to our forex factory first and foremost, because we'll go through the whole planning stage. And then we'll ideally get through all the way to the point of placing the trade. So our plan always starts at the beginning of the week.

So over the weekend, I noticed that on Tuesday, there was a big data point coming out of the UK, which would affect the pound. This is CPI, which relates to inflation, which is a high impact statistical news announcement. It's one of the eight that we trade. And it's, it's got added importance because the Bank of England recently came out and communicated to the market in one of their recent meetings, that inflation is absolutely critical to them in regards to their decision. decision on a rate hike, they came out and said if we're going to raise rates, then we need to see inflation improve. So we've got an inflation reading today.

If it comes in better than expected, that is good for the pound, and we'll be looking to buy the pound. Why? Because if it comes in better than expected, that then means that the UK is moving closer to a rate hike, which is bullish for the pound. However, if it comes in worse than expected, then that is bad for the pound, and we'll be looking to sell the pound against a strong currency pair. Again, why is that will if it comes in bad then the UK are getting further away from a rate hike which is negative for the pound. So what are the expectations so previously, inflation came in at naught point one.

It's expected based on the analyst predictions to come in flat at naught point naught. So this is really the figure we're most interested in. Are we going to get better or worse than expected figures If it's better, we'll be looking to buy the pan because it should strengthen off the back of that. If it comes in worse, we'll be looking to sell the parent. If it comes in as expected, I'm not really going to trade it because the market's reaction is likely to be fairly muted. So that's the projection.

So now that we're on Tuesday, and we're around about quarter past nine, we're in about 15 minutes away from this trade. I want to start getting myself ready for this trade. So I've started to build my plan. In regards to I know the data point that I'm going to trade. Now I need to decide on the currency pairs that I'm going to trade. So if we go on to our charts, I've got a couple of currency pairs listed.

Now it's a little bit different with the pan because the pound is generally stronger than most currency pairs because the UK is getting closer to a rate hike than most other central nations around the world or central banks around the world. So it's pretty strong across the board apart from against the US dollar. Why is that? Well, the United This date is getting closer to a rate hike than the UK. So expectations of a rate hike in the US are the back end of 2015 whilst in the UK, they're middle to late 2016. So based on that, and those expectations the pound is weaker than the dollar, but stronger than most others.

So we've got two scenarios if the data comes in better than expected, that is good for the parent. So we want to buy the pound against the weak currency pair. So the weak currency pair I've identified is the Japanese yen because the yen is actually weakened now that the eurozone and Greece issues are finally getting resolved. All of a sudden the yen has started to weaken quite significantly across the board because the safe haven that it's been used for over the last few weeks is now being unwound. So the yen is getting its weakness back. From a bigger picture perspective.

The yen is certainly very, very weak. They've got interest rates at record lows. Their central bank is very, very bearish for the Japanese yen. So it's a very weak currency pair. So I've paired the public against the yen. In regards to a buy trade, if the data comes in good because good inflation data should strengthen the pound we want to put the pound against the weak currency pair, which is the yen, so I'll be looking to buy pound yen off the hourly chart.

Remember, the timeframe doesn't really matter, but I'll be looking to buy pound yen if inflation comes in higher than that zero percent level. Now, in regards to the other scenario, if the data comes in bad and we see some weakness running through the pound, then I want to put that weak parent against a strong currency pair. So right now the strongest currency pair is the US dollar purely because they are the nation's closest to raising rates. So if the data comes in bad from the UK, and that means that their rate hike expectations gets pushed further back towards the back end of 2016, potentially 2017 was the US are looking to raise rates in probably September or December. By this year 2015. So the US dollar is much stronger than the pound based on that particular point, the US is closer to raising rates than the UK.

So if the data comes in bad that will worsen the situation for the pound. We're pairing it against the US dollar, which is strong right now, because of the aforementioned reasons. So I'll be looking to sell pound dollar. Again, I've got the hourly chart, but the timeframe doesn't really matter, because all we're looking to do is get into the trade as soon as possible, irrelevant of timeframe. Once that news comes out. So I've built my plan.

I looked at it from a weekly perspective, I narrowed in on that particular data point because it's a high impact statistical data point. Now I'm on the day of the news event. And I'm planning again, in terms of what currency pairs I want to trade always want to trade strong against weak. I've got two currency pairs to enable me to do that, depending on what the data does. So we've got a whole trade panel trade idea. Ready?

Well ahead of the event. We've still got 10 minutes To go, I know exactly how I want to play it. All I need now is the final piece of the puzzle, which is the actual data point. And I want it to either come in better than expected, and I will buy pound yen, or worse than expected, and I'll sell pound dollar. Now the other thing we need to make sure we've got sorted as well before we place the trade is our risk management. So I remember you need to put your risk management we will trade size, go through your risk management process, work out how much you're prepared to put on the trade, and then pop it in here because we're on the MT four platform.

It's in lots. I've got one standard lot here, and also one standard lot here. So that's all in now, this is my one click trading as well. So it means that as soon as I hear the news, as soon as I click on buy or sell, it's going to enter me into the market within a fraction of a second. So all that leaves me to do now is make sure that I'm ready and prepared for the news. What I'm going to do on this video is talk you through how to utilize the squawk feed on FX Pro.

So all you need to do is go to your FX pro account your online account login, go to the tool section. And then go all the way down to the FX pro squawk section. And this will then give you not only the text feed, but also the audio feed I've got it paused at the minute, purely because I didn't want to have the audio talking over my own voice. However, what I'll do is I'm going to pause the video and then come back just before the news announcement. And what I'll do is I'll turn on the squawk to get you guys ready so you know exactly what you need to listen into, before you physically place a trade, but essentially, it's going to be a guy or girl talking through the feed, and telling us exactly what the data point is, as soon as we hear that, we will know whether it's better or worse and then that will obviously have a knock on effect as to what trade we then take.

So hopefully that's bought you full circle in terms of going through that routine, the weekly, the daily, now the hourly, getting ready for the event, building that trading idea building that trading plan ahead of time, sorting your risk management out and then preparing yourself for the execution. The trade so I'm going to pause the video and come back in roughly nine minutes time just before the news notice when I'll pop the squawk on so we can go through the whole process of listening to the news and placing the trade. Okay guys, so we're back we've got about 30 seconds until the news release the squawk has been turned on. So I've got that running in the background. So again, just to reinforce a good figure, and we're looking to buy power Gen about 30 seconds sell pound dollar. So as you heard the guy on the squawk, gave us a 32nd pre announcement, so we're just waiting and ready to place the trade 10 seconds.

Again, prepping us for the announcement. flats the yarn Yes, that's fluffy on yet Corleone azura spot eight below. back to zero spot nine, and the month or month zero below the expected zero spots one scan is in line for the core. Janya low and expected as well as the month of month the RPI numbers Janya in line, month or month zero spot to above the expected zero spots one in x mortgage one spot one above the expected one. And the owners house price for sports seven above the previous five spots five. Okay, so get some comments from the O ns.

They say clothing and footwear, Fs and food are the largest down. Okay, so as we seen, we got a bit of a muted reaction to this data point because the expected figure was flat 0.0 and it came in at 0.0. So unfortunately, we can't take the trade on this occasion. Had we had a deviation either way, we'd have probably seen a much Wilder move. We haven't. So for me, it's not a tradable event.

So on this occasion, we did all the planning, we got prepper prepared for the event, but the data didn't Don't give us that deviation either way. So it for me, it's not a tradable event. So this is a good example of a trade that isn't tradable. On other videos, you'll obviously see the trades that do become tradable. And you'll notice the difference in the reaction that you get to those big deviations.