Exactly, and this one further reason that position trading is a better bet for most traders. --Typically you are entering and exiting positions near the closing, not during report times and thus there is less slippage to consider. As for stops, they are best placed outside significant reaction highs/lows and would generally not be hit during reports anyway.
So you are saying that when a big economic report comes out, the market never knee jerks in one directon stronlgy, only to reverse in 5 minutes and explode in that same direction? I am sure the MMs shake out stops on economic news quite a bit and then run the opposite direction
Or "don't trade in the few minutes surrounding a report" for day traders ... or "don't enter new positions on the day of a major report" for eod traders (who in my experience are more likely to enter on open than close).
Agreed. The stops that a daytrader uses may get hit, but position traders with properly placed stops on the daily or weekly chart do not get run and can exit at the time that they choose.
Successful position traders will generally enter later in the day or at the close. Agreed that a daytrader may want to avoid entering until after the report(perhaps well after). The successful position trader is usually already positioned prior to reports or news and these are just noise within the boundaries of the reaction highs/lows. What I am getting at of course is a wider stop than some may not be able to stomach, but if your underleveraged, you most assuredly can handle it.
And this is another disadvantage for the daytrader--these knee jerk moves during reports/news. The daytrader has almost everything working against him. Higher leverage is the daytraders one plus, but unfortunately it also becomes a negative as it creates weak hands who have to exit or be fried.
I am quite comfortable trading my system because I have tested it well and have successfully traded it, including through news days. I have moved well beyond steps 26 and 27 over here. (URL ripped from another thread here.) Feel free to give your opinions. Just realize that they won't affect my trading. I have confidence in my system until it breaches the drawdown previously mentioned some day. -Raystonn
http://www.charthub.com/images/2006/10/06/ES_317_VB.png Second cover should be at + 10 points but I covered a portion just above the 1353.25 market profile level as the delta shifted to positive............... http://www.charthub.com/images/2006/10/06/ES_317_VB_2.png If we keep selling off then I will get those two points back with a cover later. No N. Korea nuke test yet
Sold another 5@1354.50 open positions s 5 1349 s 5 1362 s 5 1354.50 total -15 buy stops 5@56.50 and 5@57 We'll see........