U.S. ISM Manufacturing PMI Forex Trading Strategy
The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) Report on Business is a high impact news release that is based on data gathered from cyclic responses to questions asked of purchasing and supply executives in more than 400 industrial companies.
For every respective indicators being gauged (New Export Orders, New Orders, Imports, Backlog of Orders, Inventories, Production, Employment, Supplier Deliveries, Prices, and Customers Inventories), this report reveals the percentage reporting each response, the net difference between the number of replies in the confident economic direction and the undesirable economic course and the diffusion index. Such replies or responses come in the form of raw data and remain unaltered.
Just as all high impact news releases causes the market to swing in either direction with the potentials of huge profits when the trend is being caught, the U.S. ISM Manufacturing PMI is not left out. The following strategy takes advantage of the U.S. ISM Manufacturing PMI economic news release. Learn how to use it for buy and sell trades 20 minutes after the numbers.
MetaTrader4 Indicators: Buysell5secret.ex4 (default setting), Buysellarrowscalper.ex4 (default setting)
Preferred Time Frame(s): 1-Minute, 5-Minutes, 15-Minutes
Recommended Trading Sessions: After news release
Currency Pairs: Includes USD (EUR/USD, USD/JPY, GBP/USD,..)
Trade Example (Click the image for full size)
Long Entry Rules
Initiate a buy entry 20 minutes after U.S. ISM Manufacturing PMI data release if the following rules or conditions are observed:
- If the Buysellarrowscalper custom indicator forms a dodgerblue upward pointing arrow that is aligned below price bars and dodgerblue line with attached lower spikes that is also aligned below price curve, it is a buy signal.
- If the Buysell5secret custom indicator forms a blue upward pointing arrow along with the indicator line turning blue within its indicator window, it is a buy signal.
Stop Loss for Long Entry: Place stop loss below short-term support.
Exit Strategy/Take Profit for Long Entry
Understanding sessions like this in the market are very volatile, as such our exit or take profit conditions is as follows:
- If a bearish candle opens and closes below the dodgerblue spike line of the Buysellarrowscalper custom indicator, an exit or take profit is advised.
- If the line of the Buysell5secret custom indicator turns yellow, exit or take profit on position(s).
Sell Entry Rules
Enter a sell order 20 minutes after the event risk if the following chart or indicator pattern are in display:
- If the red downward pointing arrow of the Buysellarrowscalper custom indicator forms somewhat above price bars, while its red line with upward spikes is also aligned above prices bars, it is indicative of a sell.
- If the Buysell5secret custom indicator forms a yellow line with an attached red downward pointing arrow, a sell order is in place.
Stop Loss for Sell Entry: Place stop loss short-term resistance.
Exit Strategy/Take Profit for Sell Entry
- If a bullish candle opens and closes above the red line of the Buysellarrowscalper custom indicator, it is an exit or take profit signal.
- If the line of the Buysell5secret custom indicator turns blue, exit or take profit on position(s) entered.
About The Trading Indicators
The Buysellarrowscalper custom indicator is a trend following indicator that alters its color between a red downward pointing arrow (with upward spikes place on its red line) aligned above price bars to denote a sell, and a dodgerblue upward pointing arrow (with downward spikes place on its dodgerblue line) aligned below price bars to alert a bulls market.
Finally, the buysell5secret custom indicator is designed by developed by a German by name Karl Dittmann, and uses a triple alert system to confirm a signal i.e. an arrow in the chart window, color change on the indicator line and another arrow attached to the line indicator within the indicator window.