Trading GBP/USD
Yes, they say people should not trade on news days but it depends on how many pips profit you are looking for. Before the news comes out, two things can happen: either the market makes an initial burst of movement (say 20 pips) then suddenly stops and begins to range till news time or the market will start ranging sideways from morning till news time. For me, I target that initial burst of movement in the morning and make my 10 to 20 pips. I dont like trading after news release because thatis usually when the manipulation starts
Whenever news is released the so called manipulation may start because market makers have staked interest in option contracts that may be triggered if price gets to them.
Now say current price for GBP/USD is 1.3670 and there is a GBP/USD option expiring at 1.3570 ( it may seem like the option is too far away below at 100 pips) but when news is released, if price starts falling below towards the direction of the option, the market maker/hedge fund is bound by regulation to start selling. They cannot stay and do nothing or they cannot trade the opposite direction which is buy, they must sell to maintain a neutral beta.
So, when the market makers/hedge funds begin to sell because price started falling after news release, it will further drive down the price of GBP/USD thus causing the price to fall towards the option barriers in defiance of any technical analysis you may know, and this is what some people refer to as "manipulation" but it is not really manipulation because the market regulators are the ones that asked them to do it.
GBPUSD later sold🤣. My sell setup didn’t show up, I would have sold it. More sells coming then
For me, the sell signal is there on the 5 minute time frame, once i see it I would time my entry and enter at the 690 level. The thing with analyzing on higher timeframes is that you dont get many entries but when you do its more accurate.
