Page 35 - EngineerIT AugustSeptember Issue 2026

ONLINE TRADING

The SARB also highlighted stronger A poorly planned trade can Waiting does not remove risk, but it
underlying price pressures, elevated still make money. A carefully gives traders time to assess whether
services inflation and rising inflation considered trade can still produce the move is holding and whether the
expectations. It indicated that a loss. The more useful review is original trade idea still makes sense.
inflation could remain above 4% until whether the trader understood
early next year and described the the risk, followed the plan and There is also no rule requiring someone
risks to the outlook as being tilted to responded appropriately when the to trade every announcement. Choosing
the upside. market behaved differently from not to participate when the price action
what was expected. is unclear can be one of the most
For traders, the lesson is clear: an disciplined decisions a trader makes.
unchanged rate does not necessarily Traders should ask themselves
mean an unchanged outlook. what they believed the market had Use August to prepare for the
already priced in, which scenarios next cycle
The market reacts to they considered and whether The July announcements are over, but
expectations, not only outcomes their position size matched the the economic cycle continues. Stats SA
Markets rarely respond only to the uncertainty around the event. is scheduled to publish July inflation
number in the headline. They respond on 19 August, while the SARB’s next
to the difference between what was They should also examine whether interest-rate announcement is due on
expected and what was delivered. they had clear entry and exit 23 September.
levels, whether they knew what
A rate hold may have little immediate would invalidate the trade idea Rather than waiting for those dates to
impact if it was already reflected and whether they allowed for wider arrive, traders can use the period now
in prices. But the voting split, spreads and slippage during the to review what happened in July and
inflation forecast, risk assessment announcement. improve their process.
or Governor’s comments can still
change expectations about what the If those decisions were made only We encourage traders to practise
SARB may do next. once prices started moving, the event-driven scenarios in a demo
trader was reacting rather than environment before committing real
The same applies to inflation. executing a plan. capital. The CFI Academy, webinars
A higher reading does not and market commentary can also help
automatically produce one The first move does not always people understand the relationship
predictable move in the rand, tell the full story between economic data, central-bank
equities or commodities. Traders Prices can move sharply in the decisions and price movements.
also need to consider whether the seconds after an inflation release
increase was expected, whether the or interest-rate announcement as A trading journal is particularly useful
pressure was concentrated in fuel automated systems and short-term after a major event. Writing down what
or spreading more widely, and how traders react to the headline. you expected, why you took or avoided
global markets were positioned at a position, how you managed risk and
the time. The market may then change what happened afterwards turns one
direction as participants study announcement into a lesson that can
Dollar strength, commodity prices, the detail. In July, traders had to improve future decisions.
global risk appetite and geopolitical consider not only the 7% policy
developments can all influence rate, but also the divided vote, the The advantage does not belong to the
the response. This is why there is stronger inflation pressures and the trader who guesses one MPC outcome
no automatic trade attached to an SARB’s cautious outlook. correctly. It belongs to the trader
economic release. who can prepare for several possible
Chasing the initial move can outcomes, manage exposure and
Review the process, not only therefore be costly. By the time remain willing to do nothing when the
the result a trader enters, much of the risk is unclear.
After an event, traders often judge first adjustment may already
themselves according to whether have occurred. The market may That process will still matter when the
they made or lost money. That is then reverse as liquidity returns next inflation figure is released, when
understandable, but it does not and participants reconsider the MPC meets again and long after
always reveal whether the decision what the announcement the July announcement has faded
itself was sound. means for future policy. from the headlines.

35 | EngineerIT August/September 2026