Page 1 of 4 123 ... LastLast
Results 1 to 10 of 38
 4 Attachment(s)    

Thread: News Trading

  1. #1

    Default News Trading

    I would like to contribute with my approach for trading news items like NFP, CPI etc.

    I trade this manually and it work quite well I must say. I have during my carrer as a Forex trader also traded on the spikes that occur during news, which I managed to do very well with. Unfortunately brokers tend to reduce the possibility to trade on the spikes by increasing the spread almost 5 times the normal. They also refuse to let trader in during the spikes or fill you at the top/bottom of the spike.
    Well… I guess you all heared it before so that’s nothing new.

    Even tough spike trading doesn’t work so well now days I still believe that one can take advantage of the market movements during the news.

    So here’s my way of doing it. Hope you guys make money with it.


    1. First of all you need to have a trigger for the news. You can’t trade every time. Only the times when you know historically that the price moves. Let’s say NFP is expected to 200k (meaning that 200k new jobs have been made since last month).
    So what If the number comes out 205k? Is it a good trade? Is it worth to get into the market? No, it is not. The market will hardly move when the actual numbers are so close to the expected. That’s why you need a trigger. I use 50k – 70k (depending on markets sentiment) for the NFP as a trigger. Let’s calculate with a trigger of 50k. So if the actual numbers would be 250k or more I would be interested in entering the market. Or for that matter 50 worst… 150k or lower.
    These triggers is something you will need to make up for your self depending on your own risk apetit. The higher trigger the safer trade. Look historically and make an excel sheet. It will help.


    2. Now, let’s say our trigger get’s fulfilled. Here is how you do:

    - Upload a 1 min chart of a currency pair that has the currency for which the release it made for. Meaning; If the release is Canadian CPI you of course need to trade something with CAD within it. GBP/JPY would be a bad choice to say at least. I would recommend USD/CAD.

    - Now take a look at the picture. It is last weeks Canadian CPI. The price starts to spike and my triggers was met. What I did was that I draw a fib. Retracement from the close of the candle before the spike I call it pre-release price (In this case 12:59 CET) to the top of the spike.

    - Put on one order at 50% fib. And set the SL 5 pips below the 100% fib. Retracement. In this case that meant a stop loss of 38 pips.

    - At 74.6% fib. You set an order that is double the size of the first order. Yes, Martingale… but it works. SL 5 pips below the 100% fib retracement. In this case that meant a stop loss of 21 pips.

    - In this trade my second order at 76.4% wasn’t hit. But let’s pretend it did just for the explanation.

    - When/If the price once again reach the 0.0% fib. Retracement (the very top or bottom of the spike) we move the stop losses so that the sum of the two orders would end up with a breakeven if the price turns against us and takes our stop. That stop would be some were between the first order and the second order since the second order is double the first. At the picture this breakeven line is represented by the dashed green line at 1.0001. We now have a space of 41 pips for the price to move within.

    - The risk. I only risk 5% per trade and to calculate that I use a excel sheet were I just enter my account balance, the top/bottom of the spike and the pre-release price. Then this excel sheet calculates the 50% fib. 76.4% fib. and what sizes I shall have at each level to risk only 5%. My excel sheet is in Swedish and I doubt that you guys can read Swedish so the best would be if you create one by yourself.

    - The Reward. I always go for 1:2 in risk/reward. Meaning; since I risk 5% I want to earn 10%.


    The END


    Addition:

    This is my approach and I use the 50% and 76.4% because I like it and it works for me. Perheps someone else want to go for other fib.-levels and if so that’s their choice to do so.

    One thing that I do if that is a release that tends to move strong, like the CAD Employment, I have my Breakeven Gain at -0.382%. This is an extension of the fib. retracement. To see this level better I use to turn the Fib. retracement around and instead of drawing it from the pre-release price to the top I reveres it and draw it from the top to the pre-release. Then you would have the same level at 138.2% fib.

    If there's any question just ask.


    Happy pipshunting!


    Regards / JoLi
    Attached Images Attached Images News Trading-usdcad-jpg 
    Last edited by jolimoney; 04-25-2010 at 11:46.

  2. #2

    Default

    Tought number 2:

    Would this be possible to code into an EA or is it too difficult perheps?

    Opinions and toughts appriciated.

    Regards / JoLi

  3. #3
    Member Far East Man's Avatar
    Join Date
    Apr 2010
    Location
    Japan
    Posts
    43

    Default

    Hi JoLi,

    Thanks for sharing. How long have you been doing this? Do you have some data, such as success rate? Which release you trade?

    Personally, I quit news trading completely quite a while ago, but I had once been a heavy news trader, depending solely on news trading. My favorite releases were NFP, CAD Employment, UK Retail Sales, and some interest rate decisions from various countries. Those were (and are) heavy movers. Some other events were useless even though they were indicated in red at Forex Factory.

    I used autoclick and straddle, but the problems were difficulty of getting filled, huge slippage, wide spreads. In addition, it started harder and harder to find a broker that can cope with news traders. So I pretty much concluded that the golden era of news trading was over. But your method looks interesting. Could you share your historical success rate if you don't mind?

  4. #4

    Default

    i like news trading,
    i always use this spread sheet when news coming,
    only trade if trend stronght.

    maybe funyoo can make newstrading ea with strenght meter, and add feature schedule news.
    it's means, ea will read schedule news,
    first we write on one file news schedule like this

    eur.txt
    ===============
    day 1 1015 1230 1530
    day 2 1710
    day 3
    day 4 1630 1930
    day 5 2300
    ==================

    then ea will active on time 1015 day1 and watch on eur pair, if calculation strenght meter say buy, the ea will buy eur pair


    i hope funyoo can create this system

    thanks

  5. #5

    Default

    Quote Originally Posted by Far East Man View Post
    Hi JoLi,

    Thanks for sharing. How long have you been doing this? Do you have some data, such as success rate? Which release you trade?

    Personally, I quit news trading completely quite a while ago, but I had once been a heavy news trader, depending solely on news trading. My favorite releases were NFP, CAD Employment, UK Retail Sales, and some interest rate decisions from various countries. Those were (and are) heavy movers. Some other events were useless even though they were indicated in red at Forex Factory.

    I used autoclick and straddle, but the problems were difficulty of getting filled, huge slippage, wide spreads. In addition, it started harder and harder to find a broker that can cope with news traders. So I pretty much concluded that the golden era of news trading was over. But your method looks interesting. Could you share your historical success rate if you don't mind?
    Thank you. I also find this way very nice. Easy to work with and profitable.

    Of course i can post a statement. But i have recently changed broker to FXCM and need to find the statement from my previous broker. Once i found it i will post it.


    I know precisely what you mean.... I also were a spike trader but i also think, just as you, that spike trading is over. Brokers won't allow it and they reduce the possiblity to trade the spike in such maner as you described.
    But this method is taking advantage of the force and movement when a news item hits a decent trigger.
    I have had some great trades with it.

    I trade most of the Rate decisions from the Majors ( USD, GBP, CFH, NZD, AUD, CAD)
    I also trade: CPI, Trade Balance, Durable Goods, NFP, CAD Employment (CAD Employment is my favorite), Retail Sales, ISM Manufacturing, latley i have also traded Existing Home Sales, Industrial Production, GDP etc.

    But exactly as you say: Not all of the ones that are red at Forex Factory is even worth trading. One need to have good historical data i believe.

    Today at 23:00 CET i will be trading NZD Cash Rate which can move big time. Normally about 50 pips but i have seen moves that are 100 pips within the first 30-60 minutes.
    My trigger for this release will be 0.25.
    It is expected to come out at 0.25 and if the raise it by 0.25 to 0.50 or lower it by 0.25 to 0.0 i will be doing my thing with the method described above in the first post.

    If i have the time during the release i can try to post my entry orders in this thread. But i can not guarantee that i will have the time.... it's all up to the market and it's movement.


    i like news trading,
    i always use this spread sheet when news coming,
    only trade if trend stronght.

    maybe funyoo can make newstrading ea with strenght meter, and add feature schedule news.
    it's means, ea will read schedule news,
    first we write on one file news schedule like this

    eur.txt
    ===============
    day 1 1015 1230 1530
    day 2 1710
    day 3
    day 4 1630 1930
    day 5 2300
    ==================

    then ea will active on time 1015 day1 and watch on eur pair, if calculation strenght meter say buy, the ea will buy eur pair


    i hope funyoo can create this system

    thanks

    Yes i believe that an EA that put on the trades automatically would be great. Some times the price moves to fast to have the time to calc. everything even if using an excel sheet.
    So... if Funyoo, which most probably have very much to do, would find the system interesting and have the time for it i think an EA would be great.
    But remeber that it possible to trade manually.

    And even if we get an EA of this system i would not in a million year recommand to be away from the computer. It is very important that the "Trigger" get met if one shall trade news.

    Regards / JoLi

  6. #6

    Default

    NZD Rate decision came out as expected. So no trade this time.

    Regards / JoLi

  7. #7
    Member Far East Man's Avatar
    Join Date
    Apr 2010
    Location
    Japan
    Posts
    43

    Default

    Thanks for the update, JoLi!

    Yes, your method obviously seem to have some advantages and looks wiser compared to conventional spike trading. And I agree that CAD Employment is the best one.

    You are right. I had troubles with brokers countless times when I was doing spike trading, and I was sick of those crazy mess.

    I personally think fully automated EA may not be needed as you say we need to watch the deviation numbers as well as the price action. Occasionally, some weird price action can happen, such as false opposite spike due to stop orders or pre-news speculation can fully screw up the market even before the news release.

    I agree that automated lot sizing calculation would be truly helpful, however, I am not sure if this is possible or not. You know, in such a short period of time, when to place an order or where is the right place to place an order is pretty much up to one's perception and sole decision. So I'm not sure if EA can properly identify the right level of retracement and calculate the right amount.

    That said, I would like to see how this post spike trading would do.

  8. #8

    Default

    Quote Originally Posted by Far East Man View Post
    Thanks for the update, JoLi!

    Yes, your method obviously seem to have some advantages and looks wiser compared to conventional spike trading. And I agree that CAD Employment is the best one.

    You are right. I had troubles with brokers countless times when I was doing spike trading, and I was sick of those crazy mess.

    I personally think fully automated EA may not be needed as you say we need to watch the deviation numbers as well as the price action. Occasionally, some weird price action can happen, such as false opposite spike due to stop orders or pre-news speculation can fully screw up the market even before the news release.

    I agree that automated lot sizing calculation would be truly helpful, however, I am not sure if this is possible or not. You know, in such a short period of time, when to place an order or where is the right place to place an order is pretty much up to one's perception and sole decision. So I'm not sure if EA can properly identify the right level of retracement and calculate the right amount.

    That said, I would like to see how this post spike trading would do.

    I am not a programmer so i don't know what's possible or not. But i do know that there are indicators out there that make fib- retracement over a specific time so hopefully it would be possible to code into an EA as well.

    And the calculation is very very easy. Just measure from the bottom to the high or vice versa and you get your amount of pips. Mulitply it by 0.50 and 0.764 and we have the amount of pips that we need to substract from the high in order to recive our 50% fib and 76.4% fib.
    Easy calculation.

    And yes, i agree, the market can move very fast during news time and that's exactly why an EA would be helpfull. I have had many times were the market has moved so fast that i haven't been able to calculate how much i shall enter with, were to put stops and move stops to B/E.
    An EA could do this faster. At least that's what i think.

    But most of the case we have several minutes before it retraces back to 50% and 76.4%. And these percentage could be easy to change in an EA. If one don't want to go at the 50% just change to 61.8% which also is a very good level.

    I have cahnged my excel sheet into English and attached it to this post. Hope it helps for those how want to give it a try.


    Regards / JoLi
    Attached Files Attached Files

  9. #9

    Default

    i found ea with strenght meter system, but maybe need some improvement, like news schedule, etc..
    so we can use to trade the news.

    thanks
    Attached Files Attached Files

  10. #10

    Default

    Quote Originally Posted by Trint View Post
    i found ea with strenght meter system, but maybe need some improvement, like news schedule, etc..
    so we can use to trade the news.

    thanks
    Ok. How does it work? There are so many parameters and can it work exactly as my method described in Post #1?
    The EA seems a little to complex for my simple strategy.

    Please explain Trint because i don't understand this EA.

    Regards / JoLi

Similar Threads

  1. Does News Trading still work?
    By ForexChick in forum Fundamentals
    Replies: 17
    Last Post: 04-30-2015, 14:15
  2. Latest trading news
    By Finbar in forum Fundamentals
    Replies: 4
    Last Post: 10-13-2014, 17:45
  3. News Trading
    By safnur in forum Fundamentals
    Replies: 2
    Last Post: 02-27-2014, 16:49
  4. (Ask) News Trading Broker
    By seekerz in forum Fundamentals
    Replies: 11
    Last Post: 10-29-2013, 06:18
  5. News Trading
    By sabrinathomas in forum Fundamentals
    Replies: 3
    Last Post: 01-31-2012, 18:40

Tags for this Thread

10%, 100, 100 pips, breakeven, broker, brokers, candle, change, eas, eur, eurjpy, forex, forex trader, free, gbp, high, historical, home, index, indicators, level, low, managed, markets, martingale, money, news, news trading, nzd, online, pips, price action, profitable, programmer, sales, security, simple, slippage, spread, stop, strategy, system, thank you, time, trade the news, trader, trading, trend, usd, usd/cad

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •