The Brexit and Trading News Events
In this video:
00:29 – Britain leaves the EA – surprise Brexit news
00:50 – Safer not to trade that news, big spreads and uncertainty
01:30 – GBP pairs retraced then stalled
01:50 – Selling the GBP/AUD and the GBP/NZD
02:20 – Confirmation following indecision
02:40 – Lessons from the Brexit news
03:08 – Trade what you see, look for opportunities
03:50 – Strength in the commodity currencies
05:07 – Watch out for the EUR pairs if more Countries follow the UK
Did you enjoy watching the Brexit news unfold last week? If you did, and you'd like to know more about that, and also how to trade any major news event, listen up, I've got some great news for you.
Hi Forex traders, its Andrew Mitchem here, The Forex Trading Coach today. It's Friday the 1st of July.
Britain leaves the EA – surprise Brexit news
A week ago, we heard the Brexit news out of the UK. Quite unexpectedly, Britain decided to leave the EU. Just before that happened, the British Pound/US Dollar reached a high for the year. Then, of course, as the news came out, and because it was unexpected that Britain was to leave, then, of course, the British Pound crashed against all currencies.
Safer not to trade that news, big spreads and uncertainty
It was a real roller coaster. It just crashed. It tumbled. The brokers prior to that event had given us plenty of warning to say, “Look. Leverage. It spreads.” Et cetera. It's going to be hard to trade, and it was safer not to. Personally, I didn't trade on Friday at all. Then, on Monday, when the market opened, we had some huge opening gaps. That is to be expected because, of course, there'd been even more fallout over the weekend. I didn't personally take any of those trades. Spreads were massive. It was just too difficult, and too uncertain to trade at that time.
GBP pairs retraced then stalled
Then, what we‘ve seen recently over the last couple of days, is we've actually seen the British Pound retrace. It's actually pulled back again. Then, just a day or so ago, it then pretty much stalled. It pulled back and retraced, and it was showing a lot of indecision, as in the pull back, the retracement doesn't look like it's going to go any further.
Selling the GBP/AUD and the GBP/NZD
In fact, right now, behind me, I've got two trades open, selling the British Pound, Australian Dollar, and also the British Pound against the New Zealand Dollar. Both sell trades, both looking very good, both in excellent profit right now, as I'm making this video and podcast.
What I've seen there, is the British Pound crash against the Aussie and the Kiwi, and as mentioned, has then pulled back. The British Pound's done this against all currencies, but it's this pull back, and it looks like its then, not going to pull back any further, at this stage.
Confirmation following indecision
I've then got confirmation to go short, as in to sell again, and that's the new ride that I'm on right now, the new trades that I'm on, looking to take that British Pound/Aussie, and British Pound/Kiwi further down, again, back towards last week's lows.
Lessons from the Brexit news
That gives us … I suppose there's a few messages in there. One, you don't have to trade all the time. Two, if the market's not showing favorable conditions, don't trade. Three, wait and be patient. Wait for the good set ups, don't force trades to happen. Don't, because everybody else is jumping on a big sell trade, don't just take a sell trade because of everybody else is doing it. Don't have that sheep following mentality.
Trade what you see, look for opportunities
Trade what you see. What for retracements, and then, if the trend looks like it's going to continue, as in this current trend now, it looks like it's heading down again, then find the opportunity to get in a sell trade at a better price. No good selling way down at the low. You're far better off in leaving that, let that move do its thing. Let it pull back, because all the time, we're finding retracements. Doesn't matter what the circumstance is. Let the retracement happen, and then, in my example, that's why I'm going short. Then, look to ride that short again.
That can be applied to any major news announcement, when you get a reaction after that news.
Strength in the commodity currencies
What else is happening on the charts this week? Because I'm looking at strength in the commodity prices, I'm looking at the Aussie, the Kiwi, and the Canadian. I noticed silver's also gone up, but Aussie, Kiwi, Canadian strength, and so when you put the weakness of the Pound, and the strength of the Aussie and the Kiwi together, looking for that pair to fall. It really comes back to the basics again. It comes back to watching the charts, waiting for the set ups. Don't rush. Make sure you've got controlled risk. Make sure you're trading with the overall likely strengths and weaknesses.
When you put all those things together, then, you give yourself a very high probability of having a successful outcome to your trading. Hope that helps. If you're in Britain, or the UK, I hope that the vote went the way that you were looking for. Obviously, because there was such a close vote, there's going to be a lot of people who are very happy, and a lot of people who it went against the way that they were thinking. If you are over in that side of the world, I hope that your vote was the one that won for you.
It'll be interesting to see, now, how Britain continues without the backup of Europe, and likewise.
Watch out for the EUR pairs if more Countries follow the UK
Keep an eye out on the Euro pairs, because my personal feeling is, is that, if any of the mainland Europe countries ever start a referendum, and if they ever get close to pulling out, especially one of the major countries like France, or Germany, or Netherlands, one of those countries, or in Italy, let's say. Any of those start, then that could be the snowball for potentially the end of the European Union. That could be a long way off, but it's just something to bear in mind, and to keep in mind. As currency traders, keep in mind those Euro pairs, as well, because, just because Britain's left, it doesn't mean to say that the Euro has escaped. There potentially could be a lot more to follow, and Britain could just be the first country to leave. Time will tell what happens there. Keep an eye on the charts, because that's always the best way to see what's happening.
Hope you've enjoyed this video and podcast. This is Andrew Mitchem, The Forex Trading Coach.
Have a great weekend. I'll talk to you this time next week.