News trading / choosing a broker

Trading Discussion News and Economy
1

Hi everyone!
I write to all of you to get your point of view in order to choose a broker according to my trading style : STRADDLE TRADING.

In fact, I have started trading some years ago, mainly with technical analysis. Up to now this style of trading takes lots of efforts and time to get a few pips by earning more than I lose.

However, I’ve lastly met lots of people trading news (straddle trading ) and apparently they are performing well in getting good pips in a few minutes after the initial spike. Also later on with the fibo retracements.

After seriously thinking about it, I finally decided to jump into this “straddle trading”.

Ones I took this decision to trade news, I have opened various demo accounts, and I am now testing various possible entry strategies to trade the spikes. The result if very positive in terms of pips, but I guess this is only because I am trading with the Demo accounts.

As far as I could read on various websites, the REALITY OF A LIVE ACCOUNT COULD BE COMPLETELY OTHER, not only because of the trader psychology which is difficult to detract from money, but also for the following points:

  1. SPREAD INCREASE: The Spread shall be highly increased during the most important news release, and I may be easily wiped out from the market even before knowing the result of the news.

  2. SLIPPAGE INCREASE: The slippage which exists between the expected price and the real execution price increases as well, and therefore, I could get the execution at the end of the spike very often.

  3. NON LIQUIDITY: The “Lack of Liquidity” in those moments not only, gives a bad execution prices, but also, bad order filling. Therefore, I may risk not to be able to close (or open) the position at the right time during the few minutes of the spike.

  4. FREEZED SCREEN: Various dishonest brokers can freeze your MT4 platform in those moments and you can stay trapped in a loosing position.

  5. STOP HUNTERS: One minute before the spike, the MM’s can move the market up and down in order to hunt all possible stop losses before the spike, therefore, I would be involved in a risky situation to place the order before the news release.

According to what I could read on various web sites, points 1, 4 and 5 correspond to Marker Makers. Points 2 and 3 to ECN companies….

After mentioning all this concerning the Spike trading, I would like to know which is your point of view on the subject, and of course hear your possible recommendations in terms of brokers to trade the news.

I believe that all things mentioned above are absolutely true in the majority of the brokers, but I also believe, that [I]a few honest brokers surely allow a day trader to trade news[/I]. Furthermore, I still believe that many traders do day trading for a living by trading news. Otherwise, “Straddle Traders” would not exist.

Thanks to all of you for having had enough patience to read all my post up to here, and I wait for your feedback on the subject.
Cheers,
PFX

2

once I lost 30% of my deposit because of the freezed screen, than I immediately started to search for new broker.

3

Hi

Your story reads the same as mine! So far so good with the straddle trading. I am using GO markets in Oz as they guarantee no re-quotes and they do not throw the spread out too far in comparison to other brokers. My friend is a coding and he has written an EA to entry the straddle trades with 3 TP’s and trailing stop options. This is working well. The only issue we have is working out the points away from entry to place the orders. I would love to hear how you are getting on and if you have any advice to share.

4

Yeah, I’ve been analyzing this particular trading style. I have to admit though I’m just demo trading and I’m just killing it! - It’s actually pretty profitable if you could just trade the Non-Farm Payroll report every first Friday of the new month. However I don’t have any experience regarding the points that you’ve made and I would like to know more about them.

By the way, I’m on an urge of programming an EA to suite my exact trading style. Maybe we could collaborate together and finish this EA faster and of course share it with others.

5

Anybody still making money with news trading?

In 07/08 it was a good way to make easy and fast pips but brokers learned there lessons.

6

Loosing 30% of your investment due to a frozen screen is pretty crazy. Are you sure it was the broker, or the server associated with the broker? In any case, I use a VPS (virtual private server) and trade from my Iphone and computer whenever I want.

9

I am thinking to start a Forex trading business, but first of all I want to know what are your thoughts as far as the best businesses to get involved with moving forward into 2011?
I’ve been looking and researching for the next big thing and haven’t really be able to come across anything that has really blown me away.
Please help me to know the Future.

10

Hello forum,

I’m trying to figure out why the USD recently turned on Jan 11 (BTW I’m on GMT+8)

I understand the technical side - Weekly support along with the 161.8 fib level added with a MACD divergence. Strong signals for a bounce off of 1.2868 area.

However, I’d like to know if fundamentals contributed to this turn around. Any ideas???

Thanks

11

Of course fundamentals were responible for this move, this week…

12

hey there,

I’m new to learn the straddle trading too… Any profitable straddle trader exists out there?