Trading news

Discussion in 'Forex' started by goldenglen, Oct 28, 2006.

  1. Why not to open position in both ways right before nonfram payrolls and place 15pip stops with , lets say, 30pip t.p.'s

    trading news, which affect forex straight away, which go for a long ride within 5 min can be profitable..
    didnt try yet but Im collecting history info on previous major news issues and putting them in one word doc with pictures of charts.. to make it easier to see how strong is market reaction on particular economic news issue..

    just write what you think..


  2. btud


    The strategy you are describing is not really "trading news". It is more likely "straddling news" (which is similar to buying volatility). Trading news means taking a directional move seconds, or fractions of seconds after a news release, taking advantage of the speed of your platform and of your news stream. News traders invest a lot of money in their equipment. Having access to a Bloomberg/Reuters system can really make the difference in this case.

    Your strategy is different, however, as it does not make any assumption on the direction of the move, but only on the "directional stregth".

    Your strategy has the following risks:
    - whip-sawing - price action on news may manifest either through strong directional moves (the best scenario in your case), but also by strong oscillatory movements which could trigger both SL's before any TP's.
    - slippage on your SL orders - you will most likely get a worst price due to lack of liquidity during news releases
    - higher transaction costs during news - depending on the platform type (market maker, ECN) this can be a much higher spread, requoting, slowness of execution time and even the risk of platform freezing altogether.
  3. I used to do exactly this when I started trading forex about 2 years ago. This was before when they guaranteed the stops - they don't now. It was more volatile back then at NFP, so I would bracket it 50 wide from the current price about 20 seconds before the news. I would do it so wide because of the whipsaws that would occur. It was wild. This worked great when the stops where guaranteed. Shortly after, they changed the rules and added a little * saying that stops where guaranteed due to their liquidity or something. Basically they changed the rules and now we could get slippage on stop orders. I tried this strategy with the new rules on USD/CHF and got whacked for 30 pips slippage off the number. That is about 80 pips from the price it was trading just seconds earlier. I stopped doing the strategy after that.

    I was using TradeStation at the time and they where using GFT to do their FX if I remember right. I no longer trade FX, use Tradestation, or trade news...

    Kind regards,
  4. I think as the position is already open it will be only a matter of closing it. I havent seen problems of executing stop loss or t.p. for the moment. I think 15 pip 20 pip stop loss would secure the accident of triggering both. Im not talking about trading FOMC cause there market can go both ways within 60 pip range easily.. depending on what will be said during statement..

    still testing, but i think i will try on real account with small lots first to see how s.l. and t.p. are executed during that high volatility

    thx guys
  5. Player


    It won't work, trust me. I burned off 3/4 of my account trying that..

    You WONT get fills until it goes against you.
  6. appreciate you reply...
  7. You can trade the news like this:

  8. This subject has been discussed a near-infinte amount of times on this forum. A search would provide you with the info of what people think.
  9. ivanovich.. yes i have read everything here concerning it..
    i didnt find a thing of opening both positions before news come out... If you place orders to buy or sell few pips above/below the current price.. ofcourse there will be a slippage. but what if the position is already opened and it is only a matter of closing it.. as 'i understood there will be still problems with nonperformance at the correct price.