ECB Press Conference and Super Mario Speech – What to Expect
Today is the day when European leaders will emerge from their torpor, will stand together and present a clear plan on how to fight the European financial crisis.
That sounds great, doesn’t it? Well, if you are familiar with the political situation in Europe, you know it will not happen. At least, it is not very likely. However, the ECB press conference and Mario Draghi speech will definitely shake the exchange rate. And that means lots of money can be made by currency traders who know what to expect and what to do with their automated trading systems. Read on to be one of them…
ECB Press Conference (2:30 pm CET)
It’s expected that the ECB announce detailed plans on how they will help to manage the Euro crisis. The last “whatever it takes” commitment was seen as a pledge of unlimited bond buying and printing new money. Probably, another big and bold promise will be made today. It is likely that volatility will increase significantly during the press conference. In case the ECB presents a clear receipt on how they are going to help to fight the crisis, a sharp price movement will follow.
ECB President Mario Draghi speaks (6:30 pm CET)
In his last speech, Mario Draghi said a lot without saying anything. As the result it was very difficult for market participants to interpret his words as good or bad news for the EURO. Price jumped like a rubber ball without moving significantly in one or another direction and there is a good chance that the same will happen today.
My recommendation for currency traders
If you trade manually, follow the outcome from the event closely and enter only informed trades. Because of the expected high volatility, you should decrease your risk and increase SL and TP levels. If you use automated trading systems (ATS) based on technical analysis, you may consider disabling them temporarily. The same advice is valid for ATS based on gambling theories (Grid, Martingale, Averaging). Scalpers don’t need to be disabled, but it’s definitely recommended to check and adjust settings if needed. If you are a client of mine, please check your e-mail inbox. I sent out a newsletter to all my clients with easy to follow instructions how to profit from the possible storm.
Happy ECB event trading!
P.S: Do you plan to trade during these events? Let me know in the comment section.