CAD/SGD long, took the trade on a thursday 18th July at 11 am AEST. This thing went backwards then forwards, then nowhere, all day. Then friday I see on the calendar, high impact news for CAD. I don’t check the coming days when I make the trade, only the day of the trade…
I hem and haw, and eventually I decide to leave the trade open. I haven’t done any economic analysis mind, I’m just feeling optimistic: what if the data surprises to the upside? The CAD data comes out, the figures miss, there is a huge volatility spike, I get stopped out. The POS then goes on to close back where it was: (Hourly chart here)
I trade with a stop that is tighter than that spike, around 35 pips on a pair like this usually, ATR depending. There is no doubt I should have just closed the damn trade before the news event. But actually, I think this has happened to me once before. With the non farm payroll, I’m sure I took a trade with the USD on like a wednesday, when NFP was due on a friday, and the trade went nowhere for two days until the data came out.
So to my questions. Has anyone else experienced stuff like this? It sort of seems like sometimes the market holds its breath while it waits for some high impact news to arrive. Is this right? Is there a way of knowing if some kind of news will hold the market in suspense? And if it is, does anyone else factor it into their decision making?
I agree with last poster here to make some trades for that matter in CAD and SGD currency you really should know a lot about the whole situation between both countries and how it works, it very unique and I bet have it’s issues.
At the time of the trade the spread was 2.4 pips with Oanda, and the ATR was about 38. I used the babypips position size calculator like I always do, found that pair wasn’t in there, so I ballparked the position sizes by averaging my other position sizes then reducing it by about 25%.
So… the very first filter in my fledgling trading system says that any pair can be looked at, provided its spread is less than or equal to four. Maybe this is not enough, and I should discount all exotics as a point of principle. Thanks for the reply!
Sorry mate but I really dont know where to start. You got a lot of work to do. Lets start with: You are obviously not analysing your trades so you have no conviction. And you dont know whether to take the trades despite news or not. So you need to journal your trades and analyse them weekly to see what is the profitability trading through news or not. Maybe start there and we’ll discuss the rest some other time.
First off good job looking at some other pairs. I personally am not against SGD. I have had 3 winning trades this year with SGD and no losers. although it was USD/SGD not CAD/SGD.
I also trade USD/NOK on occasion and that pair has given me 2 winners this year as well as a 3rd winner that I missed out on as I was not trading that week. So nothing wrong with “exotics” if the spread is low enough for it to make sense.
I will not however recommend lower time frame trades on these pairs. Stick to the daily on these pairs if you are going to trade them
As it almost always does. Notice around news events often times the first direction price moves right after a release is a fake out to get traders on board one direction and then price goes the other way quick only to finally close pretty much where it started off. This is manipulation and a lot of smart money takes a lot of dumb money here. You can argue with me that currency manipulation does not exist and that is fine. I have seen it first hand and it is real.
This could be an experience to encourage you to look into trading higher time frames as such a small spike like that would have been a complete non issue in this trade. But if you are having success with your strategy keep it up! I can only speak from my experiences in the market and getting stopped out is just a part of trading and not necessarily a reason to trash a strategy.
Every trader that has traded for more than a week has experienced the effects of news sometimes positive, sometimes negative.
You are correct watch the market during NFP week it is usually very dead up until the release and then goes crazy. Often times best to just stay out that week unless you are trading with large enough stops that can take the spikes and inevitable retraces.
Forex factory has a great calendar that displays news events as red, orange and yellow based on the typical impact that event has on the market. You may or may not find this useful. The more time you trade if you pay attention to what the news event is you will also gain a bit of feel for the impact it has.
I’ve had this experience in the past. And I will tell you that experience is the best teacher. I will also tell you that this can happen on any pair.
Whatever timeframe this is doesn’t really matter. It’s obviously in a very tight trading range and the only way to be here is flat, especially right before a news event. But that’s why we always use a stop loss, right?
These things are tradable but probably you’d have to regard the exotics in forex as like smallcaps in the stock market and expect wild volatility and all the other impacts of low liquidity. Unless you have a secondary strategy, after your main work which would be trading the majors, which would be unusually suited to exotics, they’re probably best avoided.
Are you using any indicators which tell you it’s time to get out of the trade? Most of the news in the past few weeks (IMHO) have not really impacted the market with wild swings. Price MAY retrace a bit, but then it ether goes back to whatever the trend is OR the trend changes direction.
The only news that really spooks me is the whole GBP mess and any up coming elections, Fed comments, interest rate discussions, etc.
