Buying BUND and BOBL on ECB minutes 22/02/18
Prior to a known news event, preparation is crucial – AXIA traders spend a great deal of time considering all the scenarios that could occur over a specific news event and what each scenario will mean in terms of a trade: what size to clip, which market to trade, whether to trade a second market, how far the move could go and also how to exit the trade – knowing when to exit is just as important as a well-executed entry.
Going into ECB Minutes, the overwhelming expectation was for the ECB to give a slightly hawkish tone and discussion of changing language on asset purchases soon; this is where considering all scenarios matters: a dovish tone would be against most expectation and therefore likely to cause a more significant move. Being ready for this outcome results in little hesitation and fast execution to maximise the opportunity.
The execution of this trade is reviewed in detail in the Macro Event week of the AXIA Futures 8-week Intensive Trader Training Programme, part of which is shown in the clip below, looking particularly at the benefit of fast execution but also assimilating the information quickly and acting on order flow to reduce risk on the trade meaning that profit was still made even when the initial trade comes back and runs offside.
How to take on a variety of Central Bank and event trades are analysed in detail in the Macro Event week of the Axia Futures 8-week Intensive Trader Training.