(Thu April 28 2011, 8:30am NY Time EST)
US Advance GDP q/q  : Forecast 1.9%  - Previous 3.9%
ACTION: USD/JPY BUY 2.2%  and   SELL 1.6%
The Trade Plan

We are looking for a minimum deviation of 0.3% on the forecasted figure of 1.9%. Therefore if we get a 2.2% on the first quarter GDP, it would be US Dollar positive. We will BUY USD/JPY. However, if we get a 1.6% release or worse, then we would be SELLING USD/JPY or BUYING EUR/USD.

UK Revised GDP q/q today :
Forecast 0.5%  and  Previous -0.5%
 
ACTION: 
BUY GBP/USD if 0.8% 
SELL GBP/USD if 0.2%

The Trade Plan
Our deviation for today’s trade is 0.3% to SELL and 0.3% to BUY. We’ll look to possibly SELL GBP/USD at 0.2% of release figure or worse; BUY GBP/USD at 0.8% of release figure or better.

Important News release to Trade with

TRADE THE SPIKE

1. We wait for the news release to come out. Based on the release number we will enter the market immediately if our expected deviation is hit.
2. We will try to catch the initial spike move, whole or part of the move, and get out of the trade at top of the expected movement range (40-50 pips.)
3. A stop/loss will be placed 15 pips from the pre-release price. This is the price level just before the news release. Our take profit order will be once again the top of the expected movement range.

TRADE THE RETRACEMENT

1. We wait for the news release to come out. Based on the release number we will determine “where” to get into the market if our expected deviation is hit.
2. We will wait for the market to retrace back within 10~15 pips of the pre-release price level. Sometimes when we have a huge deviation, we can enter the market at 20~30 pips from the pre-release level, but it would be based on discretion. Market will usually retrace within the first 5~30 minutes, if a retracement is to take place. A lot of times it is important to take consideration of the context of the news when trading.
3. A stop/loss will be placed 20~25 pips from the entry price. Therefore, it is very important to wait for the market to come back because if we enter too soon, we might get stopped out.