GBPJPY neutral

Week of interest rate decisions! Trading on the news!

15 September 2022 124
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The next week, from September 19 to 23, is full of important events for fast trading on the news.


Central banks of several countries will decide on interest rates:


September 20:

* The Bank of Sweden Interest Rate Decision


September 21:

* Fed Interest Rate Decision


September 22:

* BoJ Interest Rate Decision

* SNB Interest Rate Decision

* The Bank of Norway's Interest Rate Decision

* BoE Interest Rate Decision



It is worth paying special attention to BoE Interest Rate Decision. This event showed a significant average return both in trading on news and in trading on rollbacks.



What can be a trading strategy?


We choose a pair with the pound sterling, for example, GBPJPY.


The choice fell on this pair due to the commitment of the Bank of Japan to a soft monetary policy and the decline of the yen against this background. The monetary policy of the Bank of England is tighter, which is likely to lead to an increase in GBPJPY if the UK interest rate is raised.



The strategy is as follows (timeframe M15):


1. If the UK interest rate rises, we buy GBPJPY an hour after the data is published.

If the UK interest rate decreases, we sell GBPJPY an hour after the data is published.


We close the deal 1 hour after entering the market.


We put the Stop Loss below the minimum of the previous day for purchases and above the maximum of the previous day for sales.



2. A few seconds before the data update on the GBPJPY chart, we place 2 pending Buy Limit and Sell Limit orders at a distance of 0.2 - 0.3% from the current price (approximately 300 - 400 pp) with a target Take Profit order in the price area at the time of data update.


Further, if:


** the UK interest rate is rising, we leave Buy Limit and remove Sell Limit. We defend ourselves with Stop Loss order below the minimum of the previous day.


** the UK interest rate is reduced, we leave only Sell Limit, and we remove Buy Limit. We defend ourselves with Stop Loss order above the maximum of the previous day.


If the pending order to open a position does not work within 8 hours, we delete it.


If Take Profit does not work within 8 hours after the opening of the transaction, we exit the market on our own.



Do not forget about the spread and the rules of money management!




Risk warning!

Trading on financial markets involves a high level of risk and may lead to the loss of investment capital. The MarketCheese team is not responsible for the possible loss of your investment funds.

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