I know TP is the safest way to get in and take a certain amount of pips easily, I’m curious to know, how I can stay in on the release of a news item and grab more pips then just 40 or so.
When I place a trade based on a news report, I tend to put my TP at around 40 pips, but as I continue watching price action I notice that price action continues to move.
I was wondering, if I was to place a trade based on the results of news, dont put a TP and watch either the M5 or M15 charts to see the initial spike and then close the trade after the end of candlestick, would that be a good idea? Just ride the results of a news report on the M5 or M15 chart, wait for the candlestick to close, see if there is any retracement.
I’m not sure if I’ve explained this well enough, currently sleep deprived, let me know if this needs any more clarification.
There’s no real way of telling when a news candle has hit its maximum or minimum value. You could sit and watch it, but the candle could spike up and then crash back down (or vice versa if you’re short the pair) before it closes, and you might end up making fewer pips than you would if you had just set a TP value.
You’ll never get every possible pip with any trading strategy. If you did, you’d have a holy grail system and more money than Bill Gates. If I was consistently snagging 40 pips or so per trade, then I’d be happy with that.
If you wanted to, you could always open two half positions. With one, your take profit could be your usual consistent strategy, while the other you could actively monitor to try to snag a few more pips.
To be honest though, I’d be a bit reticent to do this. I have found that the less I interfere with trades, the better they do. In the heat of the moment, when you’re tired and the adrenaline is pumping, you tend to make bad decisions. Better just to set a TP that you think will consistently win you pips and leave it alone.
The only news I trade is the NFP the first Friday of every month. What I do is go to the 1 minute chart, wait for the price action to spike and reverse, then set up my fib lines and wait for the retrace to reach either the 382., 50, or 61.8 level, then get in going in the original direction that price jumped. Using fib rules you can then safely wait until the correct extension level is reached before exiting. Using this method can also keep you out of a whipsaw where price action doesn’t know which way to go and thus leaves you guessing, because with this method you wait to see if a retracement happens, if it doesn’t and price action just reverses and heads the other way entirely, then you skip it and you’re not out anything for it.
There is no way to know this with 100 percent accuracy of pip count on every trade. Therefore you need to make a plan which accepts there will be bad decisions.
The nice thing about holding a trend-following trade is that even if your exit is too soon, you always get another chance.
