Hi, I’m brand new to Forex Trading… I came trading more seriously (still demo) this time and, I found very easy to profit with retail sales, NFP and other news that did bring up the USD, also I missed several news where I could have done some pips around it…
Well, I’m starting to ask, it was coincidence and it is always so ‘easy’… or trading around the news maybe will become a nightmare for me?
Also I wanted to try OANDA as I’m still learning and they allow several lot sizes, paypal and a minimum of 1$, but I’ve head they come around the news with 30 pips of spread and that would kill my opportunities, I think it will be better for me a fixed spread broker, I’m looking for GFT and FxPro, there are a lot of brokers out there and I would like if you recommend me some one (Paypal, low minimum, fixed spread) to start risking some money I can afford to loose.
Personally I think theres a distinction to be made between news and high impact news.
Whilst we all trade the news to a lessor or greater degree when in a trade. Trading high impact news i.e NFP and interest rate decisions to name but two is very risky. Often you will find that PA jumps one way and then whipsaws back and drops off the chart.
Better I think to let high impact news push PA where it wants to go and then consider a possible trade from the newly established level.
That would depend if price moves for or against you if you have an open position before the news. If you open a position during the news and price moves for you, then you could exit the trade with a profit.
I think you can hedge a position, open an OCO order or just wait for confirmation and enter early, there are many ways and news are required to be high impact…
I would stay away from any system that tries to catch the news PA with a straddle or a hedge its to easy to get hit with a double loss. Over time its not likely to be profitable.
The way I trade news is really simple I pick(guess) a direction I think it will go and use a tight stop 10 pips or less and I enter a few minutes before the spreads get big. If it goes my way great, if it does not I am out 10 pips no more. When it goes my way its usually a lot more than 10 pips;)
Watch the spreads once a move starts you have to wait for the spreads to come down before you get back in. This is a gamble as I believe I cant predict a news spike The way it works is big reward small risk.
First thing you gotta do is give up the dream of catching the spike made from a high impact news event. Retail FX isn’t quite interbank and during such volatile price changes, the institutional trader has a huge edge over every retail trader because of his access to interbank liquidity/spreads.
But don’t worry, there’s still lots of good trading after the market settles down a bit. I’d say wait 5minutes after the news was released and make sure your broker is offering reasonable spreads by now. I’ve noticed oanda has the spreads back to normal within minutes of the news release, and beware the fixed spread option. I was trading live with GFT and noticed that they just stopped taking orders completely for 5minutes, I think it was during that surprise GBP GDP release a little while ago
Not to mention, about that news spike, just got an interesting message from my broker IBFX about news.
Basically to the effect that they can’t guarantee prices AND SL’s AND stop orders around around big gaps. So, although you can dream, “what if,” when you see a big spike, even if you had a stop order in the right place at the right time, it might not even get filled because price moved so quick. The result could be getting in at really horrid spot.
Besides all that it seems like the last year you can’t even use logic to reasonably predict the spike direction.
I’ve found though, it’s pretty easy to aviod the news spikes. Just wait for it, watch the spreads widen then go back down. Price usually spike then come back to where it started and then continues in the overall direction. So, if you trading with a Stop close to the spike it can really be a kick in the nads as it went your way anyhow after the spike.
ThePhoenix is right about your stop getting missed it has happened to me. A lot of wacky things can happen when price moves that fast. If you try any news trade strats keep your trade size small and expect to see some unexplained losses(don’t blame the broker its all in the fine print) and some big wins. It really is a gamble accept that fact before you try it.
It seems the big problem about trading the news is the broker, I think they make this obstacles because as Shr1k said, big reward small risk.
However I still think it’s dangerous but profitable, and with so many news at the end of the year my technical system has become useless and has been displaced.
I completely agree!! I hope I was clear about that.
I still like to give it a try with a small trade when I feel daring:D
I am working on the bad habits method of trading remember;).
That’s interesting, I don’t have very clear if I’m gambling as I like much more fundamental trading and long term strategies, but I see so many changes around the news that I’m looking the way to do so, you can see the wide spreads brokers make that’s for nothing, I think they don’t like us to trade at the news.
Recently with the rise of the dollar in December, I think I wasn’t gambling, for example I found very probable the fact that is NFP= good, Retail Sales = Good too, as I think on my rookie economy experience they’re related.
By the way, sorry for my English if I make some stupid error.
The Brokers spreads are wide because they do not have time to offset your and other trades in a rapidly changing maket.
If your trading the longer charts and your plan then high impact news is more of a pain in the **s. Its a curved ball in an otherwise good game. Better to exit/ hedge and carry on when the feeding frenzy has finished.
Ahh… thats an untirely different can of worms. Lots of brokers will play both ends against the middle. They know the numbers… whos long whos short and trade acordingly.
All trading is gambling or speculation. You don’t know for sure and are betting on one set of probabilities because something gives you reason to imagine it might go a certain way. Any time you trade you are betting it will go one way opposed to another, you never know for certain the outcome, so it is gambling.
[B]Profitable traders are just gamblers who find high probability edges, then use money and risk managment to make them consistently profitable when repeatedly traded.[/B]
Speculation and gambling are both gambling. [B]You are betting money that some event may happen in the future. If it does not you lose money[/B].
I believe what you mean, which is what most people mean when they compare trading and gambling, is the way most people gamble. That is, for fun, without a plan, not knowing what they are doing and just rolling the dice and hoping… Basically, very bad gambling.
Better to exit/ hedge and carry on when the feeding frenzy has finished. 
