I would like to share with you my method for news trading and would like to hear yours. Mine is not perfect and very risky, because price never goes smoothly in one direction before the news.
Simply I set up buy and sell stops above and below curent price level with proper sl and tp. Sometimes I set up trailing stop, so can catch some pips before fast retracement. I know that many schools doesn’t recommend traiding news, but I would like to hear your experiences.
Below is an example of such trade. BTW not perfect one, because price first hit my buy stop and even though sl was set up 1.60327, transaction was closed by broker (forex.com) at 1.60086. Broker asked why was that, answered - price gap. Was that? I do understand some weekend gaps, where you can clearly see that candles are not continued, but here? What is your opinion about that?
Read about trading the news in babypips school section and try it … the difficult part is spotting the breakout zone if the price is volatile even before the news…i managed to get around 100 pips trading the gpbusd news last week…for me the biggest problem is buy order because it gets activated at buy price which is dependant on sell price and their widening of spread during the news
There is no guarantee in bid/ask prices during big news releases and to be honest I don’t know a consistent
profitable trader living off news scalping(notice I said scalping).
Now brokers only connect you to the market and execute at nearest price that is available, thus leading to
price gaps. Which is common in highly volatile markets.
Not if you place buy stop and sell stop pending orders, they get executed at that price…but the problem could be mitigated by identifying break zone and then placing pending orders 10-15 pips away…i take risk by placing them 3-5 pips away…
If you only look at bid price, it is always within b.o. zone, but because of spread widening ask price sometimes breaks the zone and activates pending order which is not a big deal if you put 10 pip stop loss if the price reverses and heads the other way…you will be profitable one way or the other…
The problem where you will be at loss is if ask price touches your buy order and then returns to sideways trend…as i said this can be overcome with 10-15 even 20 pips away so if the news isn’t that volatile it won’t cause the ask price to trigger the order. If it is, you are looking at around 50 pips of price jumping and around 30 pips of profit. With lot doubling, tripling, etc. you can potentially earn much more.
Since i concentrate only on GBPUSD i can tell you that the spread widened from standard 2-3 pips, to 4 pips during the news. You can account that into placing pending orders.
I can tell you that trading the news has great potential than just following TA which is important on its own of course.
I also do like trading news picks (at least now during my newbie times :)), so far it’s not predictable completely to me and I feel that broker is creating the market very creatively, if you know what I mean. Sometimes price goes smoothly in one direction in a minute of news, sometimes goes in correct direction, than reverse hitting your sl and then rocket another tens pips in correct direction. Weidening your stops in such case, when possibly trade in wrong direction would be activated, will just wipe out your account. And those gaps, which also spotted Kasravi… Moving away your entry because of the wider spread, can cause not activated trade or activated at the end of pick and price will reverse right after (i had such cases already).
What is very common is fact that before the news price goes first opposite direction than after the news.
But apart of that I had also many nice trades in GBPUSD during news.
Robin, i would gladly accept that my trade didn’t got activated because i want the news to move the price 100 pips in either direction In that situation you can afford 20-30 pips difference between your pending orders and b.o. zone
yess it happened with news trading when we depend totally on it , Either we get easy profit or loss whih we not consider to manage before. I mostly make easy pips from news tading . Only few losses are with me in 2 years of trading . Actually I not trade just on news some very few I use this method with care and full risk management.
Guys, how was NFP news trades yesterday. Mine on demo was pretty good on couple majors. Luckily no gaps this time. But still didn’t dare to bet using my real money :).
… the difficult part is spotting the breakout zone if the price is volatile even before the news…i managed to get around 100 pips trading the gpbusd news last week…for me the biggest problem is buy order because it gets activated at buy price which is dependant on sell price and their widening of spread during the news