Trading the ECB Press Conference [February 2022]

Trading the ECB Press Conference [February 2022]

Show Video

We're about to watch a multiple six figure de trade being executed on the price ladder by late Axia traded Demetrius over the last European Central Bank rate decision that took place on February 2022. What is great about this video is hard to metre starts trading short dated bond futures, such as the German bubble five year futures contract. As we all know, the path to excellence requires one to always learn new methods of exploiting opportunity. And in a rate driven market environment. Understanding how to trade short dated bonds provides you with the biggest opportunity set you would otherwise have. Those who

do not understand the relationship between bonds and global markets in an inflationary driven environment will be doing a massive disservice to their trading performance. Just four months ago, we were preparing our trainee traders on our 12 month coaching programme to be ready for this in 2022. So for those who have followed Demetrius trading over the past six years, and has seen his exponential growth, where we have shared many of his live trades on our YouTube channel, and one of the main reasons we share his videos is because we want to show what is possible as a trader, with an unquenchable desire to improve every single day, and yet, and show how the human trader is as relevant today. As he was before, the system's traders and the ogre traders started becoming an excuse for day traders to blame the lack of performance. So for those who have never traded on the price data, you may find this video a little hard to understand. But

if you wish to know more, we have some free training modules, both on our YouTube site, as well as on our price, add a course that has free training modules, so you can go over there and have a look. Okay, so let's get started with this video, and the incredible lessons from its trading leading into this week's European Central Bank rate decision. Okay, so let's get started. Now, we always start with context. And Demetrius is incredible, and understanding the nature of movements into these events, and which markets are prone for big moves and which are prone to choppy moves. So the context leading into this ECB was, and this is directly from Demetrius his prep into this. So as you start decoding this, you'll understand how you can prepare for the central bank rate decision. But if you want to learn more, we also have a

central bank trading a course. While most big central banks, including the Fed, ECB and Bank of Canada have acknowledged upside risk to inflation and prepared the markets for rate hikes. The ECB, distanced itself from other central banks by communicating the rise in Eurozone inflation is only temporary and are a cause of concern. And that was the theme all of 2021 on the back of the supply change shocks off the COVID There was everything was transitory. But then we had this

flip from the Fed and the Bank of England. And so we wanted to see with this be the case with the ECB this year, would they be one of the last central banks to go from expecting a more low rate environment or potential hikes. So now, although the US and UK yield curves are flattened aggressively, since the Fed, and BOE turned hawkish on anticipation of rate hikes, in 2022, the German yield curve has remained relatively steeper, as SP maintained, established guidance. And so this was

important, you know, you know, yield curves back at the at the back end of last year. And trading stirs is what you see that corrective action in short, dated bonds. So, it is so important that all of a sudden, you know, especially the Fed, if you're a short dated bond trader, there was so much opportunity to be trading. And, and so having to upskill in this

area, you know, a lot of you've seen a Demetrius trade, the long end bonds, the equity indices, and so he has been upscaling himself in the shorter dated bonds, because when those yields when they expect rate hikes, those bonds move much more aggressively than the longer dated bonds on a relative basis perspective. And this was key and important. Would we see the baton being passed over from the Fed Bank of England and other central banks who were turning hawkish into the ECB? Okay, so we know Wachovia. Now, this was his scenario. So I traded having observed the hawkish pivots of other central banks are eagerly awaiting for the ECB to also turn hawkish by acknowledging upside risks to inflation. And all the traders were looking at the beginning of this year is worth that the ECB pivot and the lessons that we learned how the bond markets moved in the back of last year and that in the US and UK market, we wanted to be there when the moment was ripe for this trading opportunity. So in such a scenario, we should see a broad euro, euro zone one sell off with the short end of the German curve leading the move to the downside. So you know, and

this would, this is important if you're trading the FX futures, you trading equity indices, understanding what's happening in the short dated bonds is gonna help you, you know, there are the biggest markets on the planet, the bond markets, they clip spine in a two to 3x, the the stock market, so these are important markets to understand. So and then the peripheral bonds, because as we know, since COVID, since the European, you know, issues of sovereign crisis, that the ECB has been supporting the peripheral bonds, significantly, and they should also get hit hard on a policy shot by the ECB. And whereas on the flip side, if the ECB just maintains its current stance, which is what most market participants expect to this meeting, we shouldn't expect any significant reaction in the bonds. Okay, so we watching a trade at the moment leading into this, his his around, just just under, you know, $50,000, day $30,000 down on the day, so 1245, ECB policy, the statement was almost identical to the previous meeting with no significant changes. So there's no real trading opportunity over here. So we can see his his you know, and you'll start watching, then, what we're looking for is that the 130 press conference, so it's another 45 minute break, and then the 130 press conference. So at 130 press conference, that gets underway,

the gods are making a big comments on inflation, that's sparked an initial bond sell off. And we'll observe over here Dimitri starts positioning shorten the bond in the bubble with relatively small size, the move will accelerate soon as those statements drop. And I want you to see of it regarding the gardener. And if I should just go back one, by just go back. One measure over here, we look at yet look over here is likely to remain high in the near term, we know that she said that, you know, the central bank will want to know what they think of inflation in the medium term, mentioned their food prices increase and dishes. And in addition, price rises have become more wide spread. So as a trader sitting there listening

to her economic assessment, her inflation assessment, you sitting down debt, and all our traders are incredibly listening, you know, with their ears, whilst watching closely the lead and seeing activity and trying to synchronise that process. And sweat Demetrius is excellent his ability to synchronise all the audio visual field to digest all the information and it's a trained skill that he's cultivated over a decade long career in the markets. So let's watch over here. So the guy says wrist inflation outlook tilted to the upside, the god drops the first inflation bond bomb. So watch

over here, he's he instantly. So you can see he has all these resting bids. You know, they're all you know, those of you watch them in the past he he normally littered with one to two lots. This is his short position 165 short and a bond and 67 lat short in the bubble sets of five year futures market. So these

are the markets this is the bond. This is the bubble ovia This is six E and we watching and what I'm going to do for you just in a moment. So he instantly pulls his resting bids in the bond and hits the bids in bond and the bubble. So he's

short 612 bonds, meaning that we've seen how aggressive he can be on this medication in these conviction. And he's now so 60 Lots short in the bubble. So let's see. So now the market. You can also see the BTP sworn officer shorts, 612 lots and 700 180 Bubbles. So he saw he went and he increased aggressively is over 1250 Lots short, so you can see as he's getting short and he's gone 120 Lots short in the BTP. So this

is Italian bonds, Italian 10 year bond, German 10 year bond and the bubble and you start watching how he dances and navigate his maths across these three markets again, a highly trained skill that that can be acquired that takes time and years of refinement as his updating his information how the market absorbing is his buy orders and it's why he flickers them around as he gets into his a position building substantial position over 1300 Lots short currently in the market. Okay, so we watching his maths over here, building and navigating between here the bond over there. Now there's a deep pullback from the low across all three bond markets, the bond the bubble and the BTP, the longer end of the curve bounces a lot more than the short end of the curve. And we knew this preparing, and especially in our 12 month coaching programme, with a lot of students last year is a moment the central bank would flip that short dated bonds would hold an offer. And

you might get and that's we stock in the flattening as the long end stock correcting relative to the short end. If you don't understand that, don't worry, if you want to understand more, please let us know send an email, we can direct you the right way. But there's you know, there's a big panel swing, but he tries to hold on to most of this up his size. So you can see he went you know, to around 60,000, back down to 30,000 $30,000. So we've had this bounce, you can see the bubbles bounce less. The bond has bounced, you know more as

well as the bond. We don't have the Schatz over here. I don't think no, we don't. So you can't see that's pretty much holding its low. So he still has 1300 contracts. And then the acknowledgement from the God that inflation risks are now tilted to the upside is the first explicit hawkish comment from the ECB head. Okay. And then the moment, the moment she says that, you can see, you know, the markets come back to his original position, he starts flickering his orders on the bids, he puts out all these resting orders on the bid is dancing between the BTP over here, the bond and other markets will now focus Oh, she's read our two economic systems on the markets will focus on the q&a. And the key is to see how the

ECB is prepared to respond to the upside, inflation risks, and whether they are ready to stop the QE and begin raising rates this year. And whilst he's engineering is short, we selected one to understand these two key questions. One will the ECB right? What does he think of inflation in the medium term? And will ECB acknowledge inflation for now? And will they be looking to hike rates this year, or still on their backlog, you know, 2000, backend or 2023 and 24. So as a trader sitting

JS listening, you trying to cultivate this narrator and this is what separates the human from machine is our ability to think in story. And so he's constantly lining up the story and seeing what's happening on the order flow in order to trade and it's just an incredible skill to watch Racha. So, we're observing here, again, you know, the market hasn't really done anything yet. Okay, so we've had the we had the q&a. I mean, we've had the statement dropped at 445, we've had the original start of the press conference, and her reading the economic and inflation assessment, we're now going into the q&a portion market hasn't done much you can see, he's now you know, he's not getting a price response as his way he's so brilliant, no matter what he thinks, fundamentally, if he's not getting that price response, he's gonna be managing his risk accordingly. So you can see his navigating between around 900 contracts short to 1300. Contracts short. And, and we'll

watch now, you know, it's not achieving much in terms of p&l at this stage as a market stall after the first move down. The q&a will be critical, as she will expand. And I've mentioned this on the governing councils view on inflation. So as we watching, you know, again, in line 150, contracts short, he is the b2b slowly starting to etch back down, so is the bond, so is the bubble. Now they start making another fast run and dive

towards the low, but still not significant is onside in the buns around 1213 ticks the bubble, but his position is going back to just over 1000 contracts short at the moment. So just around 1000 contracts short, now he's trimming the short positions as the market rolls over. But trying to hold the majority because she could say anything in the q&a, she could say that inflation is still temporary transitionary. We expect to only raise rates in 2024. And acknowledge you know that this is still just a supply chain shot, and we don't expect inflation to hold. So he knows but he knows there's potential

for a big move. If the guard expands on the hawkish comments, because what the trade has been waiting for since the Fed and the Bureau and the BOE pivot, and does that hawkish comments opens the door to future rate hikes. Okay. So we still so he's in his position are, you know, keeps on bouncing around 9293 94. He's his managing. He's still going around 1000

contracts short, he wants to hold as many as he waits to hear for any big shift in any of the q&a session that will God gets asked during the press conference. So you can see not bounces from the 90 two's back up again. So he's trimming his positions is now back to just over just under 900. Lots of short in the market. So we watching this very closely. And

we've just got about another, you know, four more minutes to show his trading as the q&a starts hitting and we will be be navigating for that moment when she does make that manoeuvre and that move. So it's now 600 a lot shorter, another 10 Tick pullback. So you can see it's choppy, it's, it's, you know, but he's still wanting to navigate and hold some type of short position, what's the bond is ignited during that low area.

And if she does pivot, you know, the probability skew could be massive. So, as mentioned, you know, there's that another 10 Tick pullback is, you know, just, you know, rotating between $30,000 down to $50,000. Up with 1000 contracts, essentially, he's not really swinging that much penal considering the size, he's training. So now that the guards q&a begins. So this is the moment right now, that begins an all eyes on comments on inflation rate hikes. So she says, Yeah, my first one would be in light of recommendation. Reading seen January for the

Eurozone. How did the discussion go in the euro as the governing council? So that's the question. The second one, you had been saying that rate hikes, this is highly unlikely. What are you

saying now? Are you sticking to highly unlikely or how do you move on? So here's the questions they asked it. So now, this is important. As a trader, your ears are plugged in your finger is on the mass, and you willing, you know, you're wanting to see that any little word or shake you wanting to act. So those are the first two questions. Okay. And so we're watching the markets come back above his price, that he was originally shorter on the threes and the fours. So we're watching

credibly closely at the moment, okay. And so the market is navigating between the O threes, the 90 twos, and then look, God says, drops the second inflation bomb that the governing council as a whole is concerned about inflation, the entire trading floor on the floor that Demetrius trades, you know, everyone was just an all of a sudden, and there was this unison, of, you know, she's concerned, she is concerned, and we haven't ever heard her say that she was concerned. And the moment she said that, you know, all the trailers, it was almost as a unified force. You could sense almost that sense of occasion and the traders needing to execute. And so let's watch what he does over here. As a mom, she says, We are concerned, what's his position, so he's 300, lat short, the, you know, so he held most of his positions over here and 500, lots short, in the bubble, 350 in the bond, and 50, lots short, in the BTP. And then he served

now he starts selling more points, you'll start seeing, he starts selling 400 500, so he sold an extra 200 Lots there is now 700, lots short in the bond is gone, he's gonna sell more BTP. So what share has gone from short 60 And he's gonna start watch the mass over here. So you can see now the markets are really tracking down is now 1300. Contracts short. And when

she said she's concerned, this was the moment to take on the risk or that prep months, you know, over 1000 is almost 1500, lots short position across the bond, the bubble and the BTP. So is getting involved in this short position is, you know, remember where was holding below the 90, pause, 90 threes, and then the market really starts moving towards the downside. So we're watching closely the bubble, as you know, holding his size, so 1000, just under 1400. Contracts short in the market is up around 120,000. But he knows this has much more leg room to go. So you want to try and manage as much of the position

as much of the core with that word that she says she is concerned with inflation. So again, he's gonna you know, now in the six figure range of about 150k. You can see the BTP now is really starting to make more lows leading the way we can't see the shots that will be holding a blow, he then now starts buying the euro. So this is where he starts seeing the

right reaction in these cool markets. So then he feels when that's the right time to get in the body or look at the BTB flying off the page, you know flying off the page. Now the p&l he crosses just above the $200,000 mark as the bond sells off and accelerates he's short the bonds. You can see the bubble is holding the bonds is a little bit more choppy but the short end bond the five year bond, this is a market he never traded before and is now seven almost 700 contracts You know, 700 contracts short, he starts going on site in the euro zone at lots. His mass is dancing between four markets. He then sells another 50 Lots b2b. So 60 Lots short. He then sells another 50 Lots 103. He knows how important this comment is.

He's seeing the right price action, the right correlations across all these markets. He is navigating accordingly. He's now going out approximately $250,000 Just under $300,000. On the trade still around 1000 contracts short, the bond is smashing through new lows. The bubble is making new lows. And the guard then starts answering the second question on rate hikes. So the ears are plugged in again. And on the second question of rate hikes. He's listening in there. And then she drops the third bombshell. The ECB is open to rate hikes in

2022. Now for the last year for the last 12 months, or we have been listening to all we've been understanding is that rates aren't going up anytime soon. And with the whole movement and inflation, this was the next big question is that she was open to rate hikes in 2022. And so after watching the second question, the god the clients repeat a pledge that rate hikes are unlikely to happen in 2022, to what she's done in the past, and the market has its next leg down. And so she officially now opens the door to rate hikes. The short end of the curve led by the two year shets takes a very big hit. And then the bubble boom and b2b Follow up the Euro rallies. So we start watching, you know, watch the

Euro watch, it starts building his position, he's not just adding another 120 contracts, watch the bond. So now let's look at the market. This is the bubble and this is him, you know, mapping, you know, way sort of axing inflation tilts to the upside, that's the first move. It was, you know, a little bit choppy for a while this in the bubble. And then there was a unanimous concern that was the next big leg. And then the god

declining to repeat that rate increase hikes. And that's this move over here. So it you know, so key, and now we look at the bond. And so the bond, you know, you know, almost the same, but

let's now look at the BTP as that gets released. And then finally, you know, the Euro USD. So these are the markets, you can see the correlations between each other the peripheral bonds, such as the Italian BTP, the bond and the bubble. And so the three catalysts for the market moves in number one inflation tilted to the upside, number two unanimous concern on inflation and acknowledgement that the rates can rise in 2022. So this

is incredible, incredibly key of how you're going to be trading is knowing what you're looking for. And that's why the preparation is so important. You know, that's what we talk about in our live virtual trading floor experience. Okay, so we

watching the price action now. And you can see that, you know, these incredible moves across the bonds, so his p&l approaches $500,000 As He rebuilds a large short position in the bonds. So you can see he's over 1300 contracts short or you know, 470, lots shorten the the bond, almost 900, contracts short, the bubble 118, contracts long, the euro, and 63, contracts short on the on the BTP. Okay, so aggressive price, action,

aggressive, price has cost the markets, all those three important things that he was looking at for now, he felt that this was such a significant shift in policy from ECB. So he tried running the big size across all the markets you can see now is almost $550,000 on side and in the money. And we were watching this, you know, incredible trading the market. Now the key here is that he puts himself in a position to capitalise massively if the bonds kept selling off by trying to enlarge size in all the markets that he was in. And this is important, this is where we're sometimes he might get back a bit of p&l, but it's an order to have much more asymmetry on the other side, and you can see the market starts bouncing from the extremes as he starts winding down his positions. You've always noticed that in the past videos of

Demetrius how good he is at winding down risk exposure and how to optimise risk, exposure risk expansion, when things are moving in his favour and doing that in a very accelerated fashion is to up around you know, just around $400,000. And then as that final capitulation in the boardroom, you know in the money in the bonds. In the end after losing some of his p&l on the bounce from the lows. He repositioned shorten the bubble for the last couple years. Unlike of the move to finish on a PML high, and this was important. And now if you remember on the Bloomberg articles that come up next so what traders effectively day traders affected writing the articles that will be read at the end of the day, but we have to act in real time. And the ECBs is from Bloomberg Eastern

is hawkish pivot, Uncorks new wave of bond volatility, front end German yield curves and the sword has been learning over the past year, weekly surges not seen in years, and then a very popular and famous hedge fund Brevin Howard had one of its biggest trading days on ECB bets while the ECB is, you know, imprison the god uncork the genie by refusing to large rate increases in a post review comments and, you know, brevan, hard multibillion one of the biggest interest rate traders on the planet. This was their biggest one, you know, the best trading day ever, you know, one of the best trading days ever and for our traders on lesson four, you know, was was the ability to make sure that you capitalise on these moments, the sense of occasion, working all the years of grinding out p&l When these moments come, the ability to capitalise that's what Demetrius is so fantastic at his ability to ship from first to sixth gear in a blink of an eye. And so the key takeaways in summary, is a big shift from a major central bank. How do you prepare for it? You know, could you see it coming? What was you know, what were we doing in order for our traders to be ready for this moment? And what are the clues from the other central banks. And then your visualisation strategy. This is where he's so powerful is what we talk about

in our in our blueprint training programme, at the end of our career programme is the various types of visualisation strategies that we adopt, and which products will offer the best risk reward. You know, this is why he decided to trade the bubble. You know, you know, a few years ago, when there's no moving interest rate environment, you could trade the bonds and the other markets, and then the yield curve dynamics, you know, we are entering a global rate hiking cycle, as impatient keeps accelerating globally, understanding the yield curve is so crucial, seeing what's happening. And

this is a skill set that probably most of you out there don't understand the relationship between the short bonds and the long bonds. And it's all we're upskilling and training our traders even on my six week, career programme, when last year seeing how the Fed and the Bank of England removing the short, dated interest rate markets, that we were going to make sure that we were going to take advantage when the European Central Bank would move. And now that we head into this European Central Bank rate decision on Thursday on the back of the Ukrainian Russian crisis, it's going to be dynamically to see what's going to be happening. And his training execution. Three trigger points were the big size was executed, knowing exactly what he's looking for what were the right questions.

And this was key, you know, this is what you know, Demetrius, he batters conviction when he hears what he wants to hear and is getting the right price response. As an elite trader, this is how he executes. And not only is he fundamentally aware, it needs to synchronise with the price action awareness. And so those three big trigger points inflation tilt to the upside one unanimous concern on inflation that would concern and sending the agitators and leaving the door open for 2022 rate hikes.

So I hope you enjoyed this as much as I did delivering so much to learn from, but it all starts with piecemeal development and learning at the beginning of your career. If you find this video interesting, if you want to go deep into the Axia training method, and how our trading team of seven figure traders develop setups and strategies, and how they learn to build the most profitable trades across all market environments, then join me in this workshop. Now in this workshop, you're going to learn three powerful steps we used to train all our traders on both our London and our Poland trading desk to help hold incredible levels of consistency. How to predictably understand which setups work and

which don't, you're going to learn our two main strategies for how we perfect our trade timing. Before we enter every single trade, you're going to learn the well concept, which is a one and only technique we use to leverage a largest trade. You'll also learn how to avoid trading setups that don't work, how to avoid those large losses. And our main method we use to

identify them that saves our traders significant amounts of capital. Finally, you will learn how our traders use the power of network learning to find market patterns quicker than ever before. So you shortcut that learning curve. In the workshop we want to programme your awareness of elite performance to programme your ability to choose the right setups and programme your ability to be a consistent trader. So the trades that you execute, become more simple and clear. And I can tell you this, you'll never see the markets the same way Get, you'll never look at the markets with a narrow view of getting lost in all the noise and confusion. You'll take a first step towards deep edge market awareness. I cannot wait for you to join me

in this workshop. And I think you're in for a massive paradigm shift in your understanding of how to develop as a trader. So join me by clicking on the top right hand corner of the screen and sign up for this powerful training workshop or visit elite trader

2022-03-11 11:18

Show Video

Other news