Its very rarely that you can say this about anyone in this world.
When Draghi speaks, I patiently wait to see the man in action.
Mario Draghi could be speaking any mambo jumbo or in Chinese, French or Italian. You don’t need to understand it (if you have just started trading) but when he speaks, the markets move. The Euro especially!
Well, not just me, I guess the entire financial world waits for him to speak in front of the press and we get this opportunity to see him speak, once a month.
Unlike other central bank heads of the world, Draghi faces the press 10 times a year (pretty brave I must say as the press conference last more than 30 minutes and the journalists have a field day grilling him).
Who is Mario Draghi, I hear you ask?
For the world he is
- An Italian Economist
- 8th Most Powerful Person On This Planet (Forbes)
- Former Governor of the Bank of Italy
- President of the European Central Bank
- The world’s second greatest leader. (Fortune Magazine)
But to me, he is the man that helps me make moolah.
Che-ching! (More details on that . Keep going!)
ah.. and sometimes we get entertained at his expense too. See video below. Girl dives into him!
It was a very Hollywood moment wasn’t it …with papers flying while a woman flew into his arms (read face). I mean who attacks showering with paper and golden confetti !
But then, where else can you get to see a 70-year-old man getting attacked by a young German girl…LIVE on television while the financial world watches on!
I mean.., give the man a pat on the back. At least he wasn’t rude or swearing at the protestor. Rather Italio Mambo was still calm and composed after his initial reflex action.
He handled the situation in a very dignified manner and moved on.
What does he speak on?
- On the latest policy changes (European Central Bank)
- Forcast on things they intend to do.
- Interest Rates ( Most Important).
What is ECB?
Thank you. I will answer that too.
- ECB or the European Central Bank is the most important financial institution in Europe.
- It is the central bank of the 19 European Union countries which have adopted the euro.
- It’s main task is to maintain price stability in the euro area and aim to preserve the purchasing power of the euro.
- It is the central power hub of Europe.
- They define and implement monetary policy for the euro
- Their main aim is to maintain price stability, i.e. to safeguard the value of the euro.
- Price stability is essential for economic growth and job creation – two of the European Union’s objectives – and it represents the most important contribution monetary policy can make in that area
The only drawback is that it is responsible for controlling inflation and not responsible for the overall growth of the economy, unlike the Fed in the United States is responsible for both.
Do you want to know who did that to ECB?
Now coming to my love of him speak?
Euro can and has moved up to a max of 100 points (pips) a day.
On days when Draghi speaks. it moves up to 200 points (pips). Told you, the man is magic.
which means.. more trading opportunity for us who loves the market.
This kind of trading is called… TRADING THE NEWS!
Disclaimer- Its not for light hearted people. In less than a minute, the currency can move up to 50 pips . ( usually it can take anytime from 1 hour to 1 day for a currency to move that many pips or points).
The ECB Press Conference In Action.25th January 2018.
How To Trade The Euro during the ECB Press Conference (Happens once a month).
- The first 15 minutes is the knee jerk news.. meaning Draghi might say something positive or negative which might make the market (EUR/USD ) flow the wrong way. It could be great danger to you if you chase that move, Besides it happens so fast that you can forget about a toilet break!
- Wait till he finishes his speech and for the Q&A session starts. Often in the Q&A session , he can something that could be the opposite of what he said in the speech, so watch out for that.
- Wait for 30 minutes to an hour after he starts speaking. This gives you a better idea if his speech has made a positive or negative impact in the market. It will give you a clearer picture.
- Often after this period, the market reverses. If it reveres , go with that move and place your trade. You can make anything from 10-50 pips ( points). Walla! Moohlah!
Example- April 26th 2018. ECB Press Conference- ForexFatory Calender
Here is the detail video.
Trading Tip: Backtest if this works. Open your charts and check the ECB press conference dates on Forexfactory and see if it holds true.
The market has a pattern of doing things. The more you back test , the confident you will be in trading the market.
I would love to hear your findings on it.
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