The UK’s Construction Purchasing Manager’s Index (PMI) is a gauge of the activity level of purchasing managers in the construction industry and usually issued by the Chartered Institute of Purchasing and Supply (CIPS).
When the readings come out above 50, it implies expansion, while contraction is indicated by reading below 50.
This data gives traders a peep into the health of the UK’s construction sector.
In line with this, if the reading comes out higher than expected, it connotes a positive/bullish posture for the Sterling, while a lower than expected reading is seen as bearish/negative for the Pound.
Trading the UK’s Construction PMI with the Arrows Signal indicator is a unique strategy that tries to carefully capture profits from the volatile price actions that resonates from the release.
MetaTrader4 Indicators: Arrows_Signal.ex4 (width modified), Fratelli_MACD.ex4 (barsCount modified)
Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes
Recommended Trading Sessions: After News Release
Currency Pairs: Majors
Buy Trade Example
Long Entry Rules
Initiate a buy entry when the following chart patterns are on display 20 minutes after the release:
- If the Arrows_Signal custom indicator forms an aqua colored upward pointing arrow below price bars, it is a buy signal.
- If the Fratelli_MACD custom indicator forms lime dots above the 0.00000 level, it is a buy signal.
N.B. Notice that we waited for the conditions for all our conditions for a buy before initiating an entry on the candle labelled “A.”
Stop Loss for Long Entry: Enter stop loss below key support.
Exit Strategy/Take Profit for Long Entry
Exit or take profit on position(s) when the following conditions or rules are met:
- If a red downward pointing arrow of the Arrows_Signal custom indicator forms above price bars, it is a call to exit or take profit.
- If the dots of the Fratelli_MACD custom indicator plunges below the 0.00000 level or turns magenta, it is an exit or take profit signal.
Sell Entry Rules
Place a sell entry 20-minutes after UK’s Construction PMI release if the following indicator or chart patterns are chart patterns are in display:
- If the Arrows_Signal custom indicator forms a red downward pointing arrow aligned above price bars.
- If the Fratelli_MACD custom indicator dots turns magenta and is pushed below the 0.00000 level.
Stop Loss for Sell Entry: Enter stop loss above key resistance.
Exit Strategy/Take Profit for Sell Entry
Exit or take profit on exiting orders if the following conditions or rules are met:
- If an upward pointing aqua colored arrow of the Arrows_Signal custom indicator forms below price bars.
- If the Fratelli_MACD custom indicator dots surges above the 0.00000 level and eventually turns lime, it is an indication of a reversal.
About The Trading Indicators
The Arrows_Signal.ex4 custom indicator is a trend indicator that uses arrows (red and aqua) to define price direction. The upwards pointing aqua arrow depicts a buy signal, while the downward pointing red arrow depicts a sell signal.
The Fratelli_MACD.ex4 is a custom indicator built on the principles of the MACD, however, it oscillates around the -0.0009 minimum and 0.0017 maximum level. It also incorporates colored dots within its indicator window that changes position in tune with trends.