Trading around announcements

Discussion in 'Trading' started by alainniala, Feb 6, 2004.

  1. Aaron


    Nice posts, NihabaAshi. Thank you.
    #11     Feb 6, 2004
  2. Thanks
    #12     Feb 6, 2004
  3. Cutten


    Yes you can make money trading announcements. In fact I made a profit buying some bond futures on today's payroll number.

    Requirements are:

    i) Fast execution platform (connection, software etc)
    ii) Fast and accurate news service, and preferably someone to read through the numbers for you (to look for revisions etc once you have reacted to the headline number)
    iii) Experience at interpreting the numbers and the likely market reaction
    iv) Good order placement skills

    Results can be volatile - announcements can provide very rapid and sizeable losses, due to the very fast and large moves. Slippage on stops and market orders can be very large. Often you will not have time to place a stop, so you have to do it manually. It is easy to get whipsawed, as many mildy bullish (or bearish) figures have a quick pop, then a pullback, and only then the real rally.

    IMO it takes a couple of years to get really good at trading figures. There are several traps it is easy to fall into, that you only learn through experience (e.g. bullish figures that result in the market falling). And because everything is happening so fast, small mistakes are punished severely and bad mistakes can prove very expensive indeed. It is actually quite easy to just press the wrong button and lose money, or mistake a bullish number for a bearish one in the heat of the moment. Sometimes you can do everything right and still lose quite a lot.

    Despite the risks, I think announcements provide very good trading opportunities. My average profits on big announcement days like non-farm payrolls are much higher than my average profits on normal trading days. Figures create volatility and volatility is good for traders.
    #13     Feb 6, 2004
  4. just curious, for those who went long ZN right after the report, how were your fills?
    #14     Feb 6, 2004
  5. Yes, they was good to trade. But you need to know the consensus.
    #15     Feb 6, 2004
  6. Just a question, doesnt it slow down your computer?

    #16     Feb 8, 2004
  7. okwon


    What other reason could there be that short term intraday traders pay for Bloomberg service?
    Figure it out. :)
    #17     Feb 8, 2004
  8. dgmodel

    dgmodel Guest

    if youre inexperienced... i would suggest you stay away from trading eco's or earnings releases... unless you have money to burn, ive seen a lot of guys blow up their accnts doing this...
    #18     Feb 9, 2004
  9. Hi joethemoustache,

    I guess it would if you have a desktop that's slow.

    I use two desktops for trading.

    However, when I'm traveling (like at a relatives home in another country) and I do the same type of trading and recording on my laptop..

    .it does slow down my laptop and my laptop is not as powerful as my desktops.

    #19     Feb 9, 2004
  10. You can earn a lot of money - but you need a tight stop. And good nerves...
    #20     Feb 9, 2004