FutureMillionaire?
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I've been looking at a calendar of forthcoming financial announcements (dailyfx.com). It gives a consensus. What is that actually saying?
Consensus?
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Glenn
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FutureMillionaire? said:
Consensus: -
An opinion or position reached by a group as a whole:
A generally shared agreement
A collective opinion or general agreement.
In the financial announcements are consensus figures which represent the 'average' of the views from Financial Analysts regarding what they think a future statistic like Housing Starts will be. This can then be compared to the Previous and eventually the Actual figures.
Glenn
From my point of view, most economic releases are 'betting' opportunities for many traders.
'buy on rumour, sell on news' can apply to a country increasing / decreasing their interest rate for instance, Price will often rally / decline until the decision day. Sometimes the Price does nothing, sometimes the rumour will grab hold that the increase / decrease will be .50 points rather than Actual .25.
Price can travel sideways for an extended period of Time until the announcement -- hours, sometimes days.
The Consensus is the 'odds' for the bet
if the Consensus is an underestimate -- pair dependant -- Prices will drop -- non-US, and vice versa.
The previous US Non Farm Payroll contained an unexpected 'revision' -- in hindsight an obvious pre-election ploy by the administration, it also points out how nebulous Actual data is -- how can hundreds of thousands of new payrolls not be counted ?
Regardless of whether such reports are accurate or not, trades -- bets -- are placed on what the Actual will be, for some, based on the + / - Consensus amount.
Sometimes the Consensus / Actual from previous years may provide a guide to 'this' month's release, however note different business / economic cycles.
Volatility accompanies many releases -- but doesn't always repeat for 'that' release next month
Stops above / below pre-release Price will often get hit before the Price quickly reverses traveling sometimes for many pips/points -- continuing the trend or, beginning a new trend.
Since both the Consensus and Actual are unreliable -- ie over / underestimation, revisions
one should concentrate on the PriceTime Movement alone
note where and when a particular release will occur in the overall Movement and trade accordingly.
'buy on rumour, sell on news' can apply to a country increasing / decreasing their interest rate for instance, Price will often rally / decline until the decision day. Sometimes the Price does nothing, sometimes the rumour will grab hold that the increase / decrease will be .50 points rather than Actual .25.
Price can travel sideways for an extended period of Time until the announcement -- hours, sometimes days.
The Consensus is the 'odds' for the bet
if the Consensus is an underestimate -- pair dependant -- Prices will drop -- non-US, and vice versa.
The previous US Non Farm Payroll contained an unexpected 'revision' -- in hindsight an obvious pre-election ploy by the administration, it also points out how nebulous Actual data is -- how can hundreds of thousands of new payrolls not be counted ?
Regardless of whether such reports are accurate or not, trades -- bets -- are placed on what the Actual will be, for some, based on the + / - Consensus amount.
Sometimes the Consensus / Actual from previous years may provide a guide to 'this' month's release, however note different business / economic cycles.
Volatility accompanies many releases -- but doesn't always repeat for 'that' release next month
Stops above / below pre-release Price will often get hit before the Price quickly reverses traveling sometimes for many pips/points -- continuing the trend or, beginning a new trend.
Since both the Consensus and Actual are unreliable -- ie over / underestimation, revisions
one should concentrate on the PriceTime Movement alone
note where and when a particular release will occur in the overall Movement and trade accordingly.
