Thread: Looking For Risk On Or Risk Off Really Worked Well On Feb 14th

I basically trade by searching for risk on or risk off markets (extended eur/usd, short eur/usd}

Everybody was awaiting the U.S. cpi report on 2/14 @ 13:30 GMT. Because of the NFP, the thinking was if inflation amazed up it would be a big negative. Sure enough, the report come out high and the dollar got purchased against what (risk off, short eur/usd)

However, I look at the DAX and see it goes from negative to pos within about 15-20 minutes. To put it differently, the DAX was going in the risk on direction as currencies moved the other way. This is something I have seen frequently; the DAX is a good top indior for how ny will exchange. (Of course, this excludes news that is not scheduled to emerge e.g. Mnuchin talking the dollar down)

Finally, the euro started moving up and I got extended at 1.2320.

I recommend to not risk. I'm trading with this particular pair. Moreover, you won't have the ability to benefit from this. And you mentioned yourself, trading like this excludes the news and you can't forget about it.

Risk on/risk off works well with different currencies besides EUR/USD. The Pound, Kiwi and Aussie also function the same manner.

When markets are risk on, basically everything priced in dollars that isn't a sanctuary when things are bad (gold, treasuries, Yen) go up, so expect to see oil and a number of other commodities grow as well.

I just trade USD/JPY in risk off markets because although the Yen is a harbor, awarded Japan's large current account surplus, the dollar can proceed wither manner when things are going well.

The loonie is regarded as a commodity (oil) currency but to me it is a dollar play on risk. That is the reason why we saw oil increase over 2% on Tuesday despite of all of the recent reports on more and more supply coming into the market with the U.S. expected to reach 11M bbls/day of output by the end of the year.