Tried this this past week - worked for me - not BIG profits - small profit - but no overall loss:
Just before News Event opened a position (does not matter - long or short).
Hedge position immediately
Put VERY SMALL Trailing Stops on both positions i.e. Trailing Stops equal to spread or smaller.
Basically - within seconds of the News Event - one of the positions ‘spikes’ - take profit immediately when spike stops moving. The other position is stopped and loss limited.
Short comings are revisions and profit taking. Brokers also do not always honour exits. Otherwise it is an ok way to trade but I suggest time is better spent learning how to really trade and not just how to gamble. I would not do this with NFP as the revision will kill both your trades.
Correct me if I’m wrong but the revision only comes out a month later does it not?
I mean - if I am right here - right now - take profit at the end of the spike - either way - no problem???
Actually - you make a another very valid point:
Brokers also do not always honour exits.
Why is it that with my broker - anything ???/USD or USD/??? is executed IMMEDIATELY i.e. does not even wait or go into an order queue but anything like AUD/??? or ???/ZAR goes into a queue and juts sits and sits and sits and then gets requoted?
Anyone think of a good reason for this?
Regards,
Dale.
PS - You have no idea just how hard I AM trying to learn to trade properly - it is just that at these major News Events - why ‘look a gift horse in the mouth’?
Not only that - the so called analysts are all saying that at the moment NOTHING is trading on fundamentals but more on speculation (I think that is the term being bandied about) i.e. all our graphs, trend lines, analysis, etc. etc. does not seem to be helping. At least - that is the way I read it.
OK - well - for what it’s worth - a word of warning about my idea:
About five minutes before the NFP I put Trailing Stops (6 pips) on each of my open positions.
Guess what?
About 30 seconds before the NFP some of these started getting executed by my dealer leaving me with my ‘you know what’ wide open!
Now - either I did not set the stops wide enough - or - something was being manipulated just seconds prior to the NFP figures. Is that possible?
Let me know what you think - this did work last week for me - just not so well today - although would have been great if the execution of those stops had not happened when they did.
Put it this way - would it be reasonable to say - instead of putting very small stops on like I did - could you (or should you) put larger stops on. In other words - if you think that a News Event is good for let’s say a minimum of 100 pips for example put your stops at say 25 pips. That way - you will lose more - but at least the dealer is not aware of your intentions i.e. the moment I placed my stops before the NFP they showed as pending in the queue and were executed moments before the announcement.
Or is it common to have ‘noise’ just before a News Event?
Regards,
Dale.
Sorry - groovenator - I realise what you meant by the revision - the revised figures FOR THE PREVIOUS period also get release at the same time as the new one. Learning every day!!!
I think that you have a floating spread account. Your stops could be triggered only because the move of the spread if they are too near.
There is a like strategy on baby pips school, trading the news. You place a stop buy and stop sell orders a minute before the news report, separated by enough room, if one of the orders is triggered, cancel the other, and follow the order with a small trailing stop. The “enough room” value is calculated measuring the range of moves one half hour before the news.
For example, if the price is moving 1/2 hour before the news and the range is +/- 15 pips, when there is only 1 minute left, you place a stop buy 15 pips above the current ask value, and place a stop sell order 15 pips below the current bid value, place a stop loss of 15+15=30 pips on both orders and maybe you can set the take profits to 30+30=60 (this can be measured from other times when the same news report is done and making an average).
Then wait, if the news causes the price to rally up, once your stop buy order is activated, cancel the stop sell order. When you are let say 15-30 pips on the money, start trailing your stops 15 pips. At that point you have a free trade, and you can let it run until your are stopped out, or use the take profit order to close and go for a breakfast with the earned money
