An almost fool proof strategy

Trading Discussion
1

Have you seen every time a news event comes up the market jumps 30, 40, up to 100 pips in minutes I’m working on a strategy to profit from that and it beats looking for a trend or a breakout.

This is how i do it say at 9:30 est the US fed release a rate decision you will see a move so big that you have to get in.

This is how i do it: lets say GBP/USD is on 1,9793 at 9:20 then I will place an entry order a 1,9808 to go long with a stop loss very tight at 1,9793 and 10 pip trailing stop and an order to short at 1,9778 stop at 1,9793 also 10 pip trailing. Or you can put tp say 30 pips in ether way.

You will have a 30 pip play when the news report comes that it does not just place both you orders and make you lose money and having two entry orders it does not matter what direction the market goes you will be in the right direction.

2

How successful have you been using this method? I tried it in the past and found that it is very easy to get whipsawed out of a trade. The market spikes one direction triggering your trade, then back to stop you out, and then triggers the order in the other direction, and reverses to stop that out, then decides to go the direction it originally wanted to go :mad: . End results is that you get stopped out of both trades. Some people use it on the 1 minute charts and place their limit orders about 15 pips above & below the the previous candles high/low. I also have a problem where my broker, Oanda, freezes up on all the major announcements so you better have your TP oder set in advance so the price doesn’t retrace and your left with nothing but losses. Keep us informed of your progress.

Topgun

3

Hi Topgun
This is very true floor traders and bankers do it all the time thing is these guys no every trick in the book what you are going to do and are always one step ahead

4

Well i never had beginers luck and now I am showing profit. I use fxcm.com. You can set your account up with no dealing desk, this alows you to trade news events. You can also do hedging (no need for SL) you will be able to trade both ways. Go to the site for more on hedging. And as i say you could place TP to know you will take profit. I will sugest to test this with a demo account because some pairs are more stable so you can find them. If you PM me with your email address i will send you a link to a site with trade signals on news events. where you can also get paid features to optimise your news trades and. Happy Trading

5

OK. 3 total posts here and you’re offering a link to your trade signal site?
Hmmmm… No thanks.

6

It looks like he is offering a link to another site that offers info on how to trade news. Doesn’t sound like it is his but I never turn down links since you never know when you will learn something new :slight_smile:

Topgun

7

I take your point, topgun. If that�s the case, then please accept my sincere apology for jumping to the wrong conclusion about d3wald�s�s offered link. It�s my mistake.

(As you know, popular forums tend to attract spammers of all sorts. Some days I am more easily annoyed than others. :o )

8

I joint this forum the become a better trader not to spam and if you want to become better you need to share all knowledge on how to do it and i was offended by that remark but i also accept your apology

9

d3wald, I did not wish to offend you. Sorry.

As to your trading idea, I have used option straddles to enter trades or catch “breakouts” from rangebound conditions in currency futures. I have had no success with this technique in forex; nor do I have an answer as to why.

10

I have come up with a grate idea, you know that one currency has more than one pair. And there is a saying don’t put all your eggs in one basket. so do this in all the pairs you will increase your odds.

11

Hi everyone, this is my first post—please be kind!

BabyPips.com has been very educational as well as the FORUM threads–I have been reading mostly the FA�s thread since my interest is along those lines–mainly trading the news.

When I happened into �ForexTown� and read � An almost fool proof strategy� by d3wald , I knew I had found another who was thinking along my same lines in trading the news.

Also, I would like to thank �d3wald� for the referral link to
�SecretForexSociety�.

�d3wald� I agree with your premise of using a �straddle� prior to the FA event, however, I have a little different approach.

Like you, I am using FXCM as my broker, prior to them changing from a �fixed spread� to a �no Dealer Desk�, my �straddle� strategy had been working just fine in a demo account—had not yet went to live trading, but was about to.

The dynamics changed when FXCM changed to the no dealer desk, so I had to change my research focus—I needed to know how the spread fluctuated with volatility the first minute of the FA release. My research is starting to give me an idea of the probabilities.

My approach to trading the news comes from observing what the market is doing 2 minutes prior to the FA�s–it seems to hold its breath–most of the time–allowing for the setup of an entry straddle order 2 minutes prior to the FA�s, using the last 30 seconds to modify settings and launch my entry orders.

I use a cheap little electric clock with a second hand to time me for modification of my entry order setup and launch–believe me, with some practice your mind can work the time.

I have not yet demo or live traded this strategy, probably next month I should have an idea what FA�s offer the best probability for a win considering the spread probabilities.

I would really be interested in how you are progressing with your strategy.

Good luck with your endeavors!

12

Ask hobbit about this operator:
http://www.babypips.com/forums/newbie-island/1656-hope-you-dont-bite.html

13

My approach to trading the news comes from observing what the market is doing 2 minutes prior to the FA�s–it seems to hold its breath–most of the time–allowing for the setup of an entry straddle order 2 minutes prior to the FA�s, using the last 30 seconds to modify settings and launch my entry orders.

Hey gypsytu, I see what you wish to accomplish, but isn’t that an awfully stressful way to trade? In a previous post I referred to using straddles in other markets (currency futures). So far, I have not found a [U]consistent[/U] mechanical method to enter a forex trade in the correct direction based on a news event.

Please keep us posted on your progress. Best of luck with your strategy…

14

Hi toptick07

Granted, the time frame may seem stressful, however I found being in a long period trade
even more stressful and my �baby sitting� patience leaves much to be desired.

Most of the stress is eliminated with the knowledge that the market has a high probability of going either up or down an amount that has been �probability� researched–in other words, a set of FA�s that has consistently moved either up or down more than 20-25 pips,
without a large retrace during the first minute of the FA�s, and meets the 2 prior minute qualification, can be a sure winner.

Of course much depends upon how well one can handle the �setup� and �modification� period–after launching the entry order, it is out of ones hands–it will go one way or the other, or, it will be a �dud�, and you can exit.

Stress is gone!

Thank you for your post.

15

Hi gypsytu,

I was thinking the same thing when I first started trading with fxcm.
I noticed the same time frame on my charts as you did and it seems the strategy would work. I tried it on a demo account at fxcm prior to the no dealing desk switch over and the sofware froze as the news broke,I was not able to track my tradesd. I called fxcm and they said they were having technical issuses and trading would reume shortly. I started to read the forums for more explainations and found out that a lot of traders do not trade news which I knew from trading futures but thought 4x might be different. I trade before the news and after the news but not on the news as fxcm systems tend to freeze up or just unable to handle the volatility. I did try this one more time in my live account (no dealing desk) and the same thing happened. This time I lost money , I complained and was refunded for the software glich. Sorry for the long reply. Good luck trading. topcat

16

Eh topcat when they had that glitch I coulda made a huge amount of money. Metatrader was working fine at the time, and was ahead, so when you entered the market you knew where the price would go. I didn’t make any cash though. For one thing, I was new, I was timid, and I decided even if I did make alot on the trades, it wouldn’t help in the long run. I may have gotten it taken away anyways though for scalping. Just thought I’d let you know, of course it has never happened again, and I never trade around that time. Yeah this is pretty much what happens when I take a break from studying, random rambles, well have a good one eh!

17

Hey Topcat,

I have been reading other web site FOREX Forums concerning �News Straddle Trading�.
It appears that the strategy is workable—however, only with fast dealers who can handle that kind of �volatility�.

I would be interested in knowing when you did your live account trade (no dealing desk).

I am under the impression that it takes awhile for new trading software to be �cleaned� up–FXCM may have improved by now (I hope).

Thanks for your post.

18

Hi shadow,

Were you using MetaTrader with FXCM?

19

No, I don’t think you can get fxcm with metatrader, just two different platforms. So metatrader was accurate with the price and fxcm was behind. When I opened the two platforms and mt4 was 30 pips ahead, I couldn’t believe it, and then it went down and the other went to the mark where mt4 was. I was just thinking this can’t be happening. So I figured that it was always like this. It was my first time using metatrader. well let’s just say the next day was quite different story. best eh!

20

What you are saying is very interesting, that is, MT4 showing in advance of FXCM. Looks like your dealer has faster software, or, uses a different live feed trading source.

I understand different dealers use different feeds for trading–now I will have to research the various dealers who use the MT4 MultiTerminal, and see who has the most rapid trading source.

Thanks for the info!