0:01 Hey guys, I hope you're well. So,
0:03 trading as a whole is definitely not
0:05 easy or simple, but in certain
0:06 situations, if you know what to look for
0:08 and you prepare correctly, it can be
0:10 very straightforward. Like, extremely
0:12 extremely straightforward. For example,
0:13 this trade right here is probably one of
0:15 the most basic trades I've taken so far
0:17 this year. And it just goes to show how
0:19 effective and how important it is to
0:21 understand fundamental analysis. More
0:22 specifically, this high impact news. And
0:24 you've probably been told to stay away
0:25 from it when in reality, the sooner you
0:26 learn this stuff, the sooner you'll
0:28 become profitable. So, let's run through
0:29 it all and let's break it down. So this
0:31 trade was taken based off this high
0:33 impact news release right here and this
0:34 was an interest rate decision from the
0:36 RBA. So the RBA just stands for the
0:38 Reserve Bank of Australia. So for some
0:40 context, the current rate before
0:42 obviously the print was released was at
0:44 3.6%. Right? So this was their current
0:46 cash rate and they were forecasted for a
0:50 25 basis point hike to 3.85%.
0:52 Right? Now we also had a Reuters poll
0:54 from economists showing that 24 out of
0:56 31 expected a hike. Seven of 31 expected
0:58 no change. And then we also have which
0:59 I'm not going to get too into here, but
1:01 we had a lot of past economic data
1:04 pushing towards um that would that would
1:05 make the central bank hike rates by the
1:07 25 basis points. Right? So we can see
1:09 here that the markets are really priced
1:12 in and they're really expecting this 25
1:14 basis point hike to 3.85%. Now in this
1:17 situation, a hike is most likely not
1:19 going to cause much strength, right?
1:20 Because when something happens to the
1:22 markets that they already expect, it's
1:24 unlikely to move aggressively because
1:25 the market's already expected, right?
1:27 already priced in. Just think about
1:28 saying something to someone that they
1:30 already know, they're probably not going
1:31 to have much of a reaction. But if you
1:32 say something they don't know, like for
1:35 example, if we had a 50 basis point
1:36 hike, that is where you're going to see
1:38 those aggressive moves because it's not
1:39 what the markets are expecting, right?
1:42 So if we do get that hike rate, which is
1:43 most likely what we're going to get,
1:45 obviously we did get that, but if we do
1:47 get that hike rate, we're just really
1:48 not going to see that much strength
1:50 because we're already priced in, right?
1:52 So what that's going to do is is that's
1:54 going to shift the focus from the cash
1:56 rate to actually the main focus is going
1:59 to be on the statement, right? Given
2:00 that we have the cash rate as
2:01 forecasted, right? So you have to
2:03 remember this is very very highly priced
2:05 in there is a very very big chance that
2:07 this is going to be the the the rate,
2:08 right? So which is what we already
2:10 expect. So now the focus is going to be
2:12 on the statement. So when we're looking
2:14 at the statement, we want to look at are
2:15 we receiving hawkish language, right?
2:17 Are they using doubbish language or are
2:18 they giving us any forward guidance,
2:20 right? potential things that they're
2:21 going to do in the future with rates,
2:23 just any forward guidance, right? So, we
2:24 need to kind of look at this statement,
2:25 take out different excerpts from the
2:27 statement and see again, you know,
2:29 hawish, doubbish forward guidance. What
2:30 are we getting from this? Because this
2:32 is kind of going to give us the
2:34 potential move because if we just get
2:36 that that rate as as we're expected, you
2:37 know, we're not really going to move
2:38 that much because the market's already
2:41 expecting it. Okay, so this is the
2:42 release right here. You can see that the
2:44 cash rate comes out as forecasted,
2:46 3.85%. Okay, so I'm looking at my
2:49 economic calendar. I see 3.85%. I think
2:50 okay that's what the markets are
2:51 expecting and then I automatically shift
2:53 to the news feed to see what the
2:54 statement is saying right I want to see
2:56 key specific things from the statement
2:57 which could potentially again give us
2:59 doubbish hawkish language or potential
3:01 forward guidance right so here are some
3:03 of the statement right inflation in
3:04 fourth quarter was materially higher
3:06 than expected partly due to less
3:08 persistent factors today's policy
3:09 decision was unanimous labor market
3:11 conditions remain somewhat tight and
3:13 have stabilized in recent months there
3:14 are uncertainties regarding the outlook
3:16 for domestic economic activity and
3:18 inflation as well as the extent to which
3:20 monetary policy is restrictive. Okay,
3:22 the key thing here uncertainties, right?
3:23 So these comments, I'm not going to get
3:25 into it too much, but basically these
3:28 comments give us a hawkish tone, right?
3:30 So potentially, is this going to lead to
3:31 more rate hikes? Right? Are we going to
3:32 hold these rates higher for longer?
3:35 These is hawkish tones, right? So this
3:37 hawkish tone is going to cause that
3:39 Australian dollar strength. So when we
3:41 do have, for example, the rate hike,
3:42 we're going to shift straight from the
3:44 hike straight down to here to the
3:45 statement. We're going to look at the
3:46 statement, understand what it's actually
3:47 talking about. Are we getting anything?
3:49 Sometimes they'll say something very
3:50 hawkish and then and then they'll back
3:51 it up with saying something very
3:53 doubbish. So we don't get that kind of
3:55 clear way. But here with these comments,
3:57 these give us a hawkish tone. So we can
4:00 expect to see from those comments a rise
4:01 in the Australian dollar obviously from
4:03 that hawkish tone. Right. So now let's
4:04 jump into the charts so I can show you
4:06 what I'm looking at technically. Okay,
4:08 so we're on the charts and this is the
4:09 trade right here. You can see it was a
4:11 pretty quick trade but it was very
4:13 profitable because I did go in quite
4:15 heavy. So, let me just come down to the
4:16 one minute just so it's a little bit
4:17 easier to explain, a little bit easier
4:19 to see. I did enter this trade in the
4:20 fiveminute, but I'm just going to come
4:21 down here. Yeah, just so it's easier to
4:23 explain. Right. So, leading into before
4:25 we have like a high impact news release
4:27 just like this. I want to see if we can
4:29 find ideally a range before we get that
4:31 release. Right. So, you can see here by
4:32 looking here, we don't really have a
4:34 range. So, obviously, not every time we
4:35 have a range, just like this time. So,
4:37 the next best thing I want to look for
4:38 is significant highs and lows. just some
4:40 kind of structure points that I can then
4:42 base off to see breaks of structure to
4:43 either the upside or the downside.
4:44 Right? Obviously in this case it was to
4:46 the upside. So I want to mark off a high
4:48 here and then a low here. So now that
4:50 I've got those marked off, the next
4:51 thing I want to look at is obviously the
4:53 economic release, right? So you can see
4:54 this very strong candle here was
4:56 actually the release itself. So we do
4:58 get that obviously like I've explained
5:00 that 3.85% as forecasted and I remember
5:02 looking at the charts for the first few
5:04 seconds price barely moved because again
5:05 that's what was forecasted that was what
5:07 was mainly priced in. Right? Right? So
5:08 when the markets get that, it's not
5:10 really any new information. So they
5:11 don't really move that much. So my focus
5:14 goes from the economic calendar to then
5:16 the news feed to kind of read those
5:18 statements from the RBA. Right? So that
5:20 is where the main focus is. And as I'm
5:21 trying to skim over those, obviously I
5:23 have to do it quite quickly. So I have
5:24 to see kind of what tone that we get
5:26 from those those statements. Right? So
5:27 obviously like before I explain, we do
5:29 have those hyish statements. And then I
5:30 want to see okay, I'm expecting
5:32 Australian dollar strength. I want to
5:34 see the Australian dollar against the US
5:36 dollar obviously here push up and break
5:37 above structure. Right? So let me just
5:39 come back to the five minute just this
5:40 is this is actually what my entry was
5:43 on. So I can see here price is slowly
5:45 pushing up. I was actually wanting to
5:46 enter when price was here but I have to
5:48 obviously sit on my hands and wait to
5:49 get that clear break of structure.
5:50 Obviously I need to follow my plan. So
5:52 we get that break of structure. Price
5:54 throughout here was still moving quite
5:56 slowly which is great. It almost yeah it
5:57 was really really easy. Entered here
5:59 just straight away as we broke really
6:01 really good entry. Um, and then stop
6:03 loss obviously here below uh this low,
6:04 right? Or at this low right here. And
6:06 then I'm going to target this key level
6:09 here, right? I did have a full TP um at
6:11 this up at a different high, but I did
6:13 take out around 90% of the position
6:14 right here just because like I mentioned
6:16 before, I was in quite heavy and the
6:18 main goal for this trade was just to
6:20 take advantage of that initial kind of
6:22 push, the initial surge and then get out
6:23 as much as I could, right? So I did take
6:25 out 90% here. Um, and then I did put my
6:27 stop loss just obviously at break even
6:29 but a little bit up to to catch those
6:30 fees, right? Obviously, if I put it down
6:31 here, then I would be still paying fees.
6:34 So, just enough to to yeah to pay for
6:35 those fees. And you can see here price
6:37 obviously did go straight up, hit the
6:38 take profit, which is great as I
6:40 expected, but we did end up taking out
6:42 that 10% runner, which is totally fine.
6:44 I am actually looking potentially for
6:45 something to continue up here, but I'll
6:47 have to look at that later. Um, but
6:49 yeah, you can see we enter, go straight
6:50 into profit again. Price was moving
6:52 quite slow, quite steady, um, which
6:54 would made it trade even easier. um push
6:57 straight in 90% out here stop loss to
6:59 cover those fees stops below here and
7:01 you can see obviously how important it
7:03 is and how kind of effective it can be
7:05 to understand kind of the fundamentals
7:06 again I like to think of it as the
7:08 fundamentals give me that reason why and
7:09 then the technicals is that break that
7:11 kind of the reason when to actually
7:13 enter the trade right so again this was
7:14 a very very straightforward trade not
7:16 every trade is like this I wish every
7:17 trade was like this because then it
7:18 would make my life a lot less stressful
7:20 but unfortunately it's not right there
7:21 are things that get a lot more
7:22 complicated but something like this is
7:24 great to have it just feels feels almost
7:25 like a no-brainer trade. You can get in,
7:28 go quite heavy, and feel like it is,
7:29 yeah, a very, very high conviction
7:31 trade. So, I hope you found this video
7:32 helpful. Um, if you want to actually
7:34 trade live with me and do this live and
7:35 learn how to interpret the fundamentals,
7:37 then you can check the description. But
7:38 yeah, I hope you found this helpful and
