Hi there! I am working on news trading strategy and that would be no lose no risk strategy. Only one thing is left to give final shape to the strategy and that is:- How many pips move approx in related currency pair(s) due to which news and does price get back to its previous stage or keep on moving to the direction of news effect. I understand that there is no fix rule for all these but is there any indicator or anything like that using we can come to know rough idea. I can do it manually by going back on chart or running historical data but just to expedite the process.
[QUOTE=“tom magar;700039”]Hi there! I am working on news trading strategy and that would be no lose no risk…[/QUOTE]
Okay dude sorry to shatter your dreams but there is no such thing as a no lose no risk strategy. That is one of the most noobest things I have heard. If all those genius math head quants or finance whiz MBA traders can’t figure that out, you think you can?
There will always be risk, whether it’s execution risk, outcome risk, liquidity risk, etc. Even if you set your trade to BE you think it’s guaranteed a fill? All those traders who got burnt during the Euro-Swiss peg fiasco can tell you that’s not the case. Any ECN trader will tell you it depends on available liquidity. And if you’re trading bucket shop broker, the spreads, slippage, requotes during news will destroy this edge you speak of.
Sorry for being so seemingly pessimistic, but I’m not, I’m realistic. And reality is this just won’t work like you think it will. You can either think I’m being a ****, or realize I’m trying to teach you something about markets. In the end, the choice is yours.
Now you said yourself there is no fixed rule, how the hell can you create fixed rules? No, there is no rough idea. It all depends on outcome vs expectations. It depends on the markets perceptions, their sentiment, and how they perceive this news will affect the economy’s outlook. It all depends on order flow because news DOES NOT move price, order flow does. A good NFP number can sometimes cause E/U to fall hundreds of pips in days, yet sometimes it’ll only make it move a measly 50 before the effect wears off. This is because it all depends on market participants perceptions of the news and what orders they will enter after that news that leads to a price move.
Price can get back to its previous stage, or keep moving in the direction of the effect from the news. It all just depends whether new participants will step in with orders to sustain a price move.
Now you can manually backtest this yourself, or you can take it from someone who has experience. In any case, good luck, you’ll need it if you keep pursuing this “strategy”.
was this post necessary or just out of pure cynicism?
Hi ForexForte! you are correct and I am sure once you read this post I too would be correct. It was my mistake that I did not mention what is the strategy;-
- Assume NFP news is about to releases at 10:00 AM
- Place buy and sell order (same lot size) at 9:50 AM (in order to avoid order rejection, high spread etc) No tp No sl. If your broker is USA based it would be impossible or can open tow accs with two broker.
- Close the profit position when you feel news effect is about to finish and price is getting back where it was before news or moving into same direction but slowly.(For this point I am looking for data about all news effect)
- Now you have one open position in loss. If due to news market moved 50 pips above and reverse back to 30 pips, you can close 2nd position (still you got 20 pips).
- If price keeps on going to news effect direction, follow the rescue strategy e.g hedge or open other lot at reversal points.
BAD BAD BAD IDEA!
First of all, I would never assume NFP would be released @10AM because it is always released at 8:30AM EST. Sorry, I had to… 
Anyways… What you are doing here is nothing new. It’s a form of a strategy known as news straddling and was quite popular many years ago. You can find plenty of these types of strategies where you set a buy stop and sell stop ahead of a volatile expected news release. Problem is, it’s a recipe for disaster.
You talk about closing the position when you FEEL the news affect is done, or price will turn. Well guess what, no matter how badly you feel price will turn or the initial news euphoria has faded, it can prove you wrong and go against you. You can never pinpoint exact turning points and tell when there is unsustainable news flow pressure because you are not a tier 1 top bank with the most customers and being able to see the order flow. You just won’t know, and relying on your gut feeling will never make you be able to perfectly call accurate tops and bottoms. Now you can hedge or open another lot and wait for price to turn, but what if it was a very volatile news release and caused price to fall hundreds of pips and not look back. Your account will get killed because your emotions will not be able to handle unwinding those hedges and trading out of those positions.
But that’s just one example of a trade gone wrong. What about if right before news hits the wires stops are run (which does happen). Price shoots up, activates your buy stop, then falls down to activate your sell stop. It falls some pips and you close the buy stop position at a loss while letting the other one run. Now price turns again and goes against you, and losses pile up. Yes, there are some news releases where it wasn’t enough to change market participant perceptions or wasn’t unexpected, and these news releases are ripe for exploitation by dealers for stop hunting. They hit stops both ways to make commissions and news straddle traders get killed. On a chart this looks like price is ranging, then a spike up, followed by price moving down and breaking to the downside, followed by it moving back into the range.
I can name many many more examples of how news straddling can go wrong, but I encourage you NOT to listen to me (although it’s a been there done that sort of thing, well close enough to it). Go ahead and test it for yourself. It pays to do that because eventually you’ll find a good strategy, but you always need to test your ideas in order for that to happen. What I DO encourage you to do is demo test this strategy for a while, then if you’re making money, trade it on a small live account. If it works after a while, then go ahead and go all in. I really do not think you’ll make it past the first stage, try and prove me wrong.
I cannot give you numbers for how volatile news releases are because they can always change. I can give good educated guesses, but it all depends on the situation, whether market participants are really focused on that data or not, if people are talking about it; that sort of stuff.
Anyways, good luck and please report back.
Thanks for your comments I was shocked when I read (BAD BAD BAD IDEA!) :20: Its okay. I am not sure how straddling news strategy works. What I think you may did not catch exactly my strategy. Btw I will do it in real ac practically and show you. One more strgy for you, when market opens up on Monday morning, watch 20 pairs. Right after 30 minutes of market open see if candle is bull or bear, if bull go long if bear go short. Set trailing stop Stop loss 10 to 15 pips. You will see out of 20 15 positions will close in profit. or you can do one thing do not set tp or sl just watch overall profit and close when you feel its enough. Make sure do not keep your positions for long its only for few hours or until you get overall profit. What you say about this strategy?
hello everyone
i would love to trade the news successsfully. unfortunately, i have some strong doubts that it is possible (for me) to do this.
i looked at the last nfp and you can’t see it but the price gapped / slipped conciderably. enough that any kind of straddle would have encountered serious problems.
your strategy seems to be to count on a retrace and if no retrace then apply cost averaging or reverse martingale or something also seems to be haphazard, price action can be very messy after news. it can look like retracing but it is just profit taking / a trap. no tp or sl also seems like a bad idea. you might as well just decide your trade direction after the news and go from there.
there are at least two or three free ea’s for news straddles you could try having a look at.
the blogs here will discuss upcoming news events with good analysis and also info for fng on the fpa web site can give some estimates (a bit cryptic but if u google u will find it).
if you’re serious, what i am concidering doing next, is looking at making a table of the last years worth of news releases of each type, what the figures were, what the deviation from expected was, and what the move was, and what the profitable strategy / trade would have been, etc. the last nfp news impact was so quick and with such slippage that i am not sure it was possible to catch anything out of it directly. lots of forward testing and close examination of tick charts required. i have some doubts that backtesting will be at all accurate.
i am hopeing perhaps with less high impact news events the price will move more smoothly and be workable as a strategy. perhaps some news events are more likely to retrace than not (or more likely to continue the move) and that may be worth trading.
keep us posted and good luck, cheers.
just thinking out loud but you might find that when released figures are as expected/forecast, the market will still move as brokers and banks move the market any way via order flow. in such circumstances, a retrace would seem more likely.
Hi Pabloroacho! Great go for making (making a table of the last years worth of news releases of each type, what the figures were, what the deviation from expected was, and what the move was) that surely help to make this strategy more clear. Why I thought about this strategy (I will explain in details coz here still lots of confusion) because traders set buy stop and sell stop orders before news in difference of 10 or 20 pips but most of the time both orders get executed and finally traders turned into loss. Using my strategy we can still turn those trades in profit but that would be really tough because there is difference of 10 or 20 pips between two orders. What I do, I place buy and sell orders at the same price and let it go whichever direction will it go after news. This is the 1st step. 2nd step is to see if news effect is about to stop or has been stopped. For 2nd step I am looking for history data to get more closer look so we can Analise market move. Most of the time time price goes up few pips and came back to down and it is not pretty hard to guess so what you can do close profit one when market start coming back down and close second order too when you see overall is profit even second position is in loss. 3rd step if price keeps on one direction, not a problem market never goes in one direction for all specially after news since we will have both positions hedged so even small retrecement can get us out of the trades with small profit.
There are some traders who have created an edge around session opens and made money (although it’s hard right now due to lack of volatility; options are a better play). But you are setting very rigid rules on a very dynamic market. Whose to say after 30 mins, the first candle is a bull candle only to be followed by price falling against you. You might be able to rely on chances to make the strategy somewhat profitable, but throwing in that word [U]feel[/U] again won’t help because you can’t just feel the market will turn. It [B]will[/B] prove you wrong. You see, the premise behind your strategy is that in the past statistics have said it will be profitable. But what if when you go live, the first 10 trades you take are losers. It’s very much so possible because, and I say this a lot, past statistics and no bearing on the future. Look into behavior finance, gambler’s fallacy, and the coin toss experiment. If you found a strategy with a 65% win ratio in the past, that does not mean you have a 65% chance of winning the trade and a 35% chance of losing. You’re still playing a 50-50 game because the past plays no role in the future. Your strategy is built on hope that the statistics won’t change. I personally favor trades with a for sure 70-80% chance of winning, but I don’t trade past price and my entries are made for reasons that aren’t available on charts. I’m willing to bet you that IF your strategy produces profit, it will NEVER make more than 60% a month. I highly doubt you’ll even get near that close, whereas my strategy has made triple digit returns many times. But like I said, the reasons for my trades don’t come from charts.
I really would like you to try this strategy out. I’m very keen on how this turns on and I don’t want to discourage you. Actually I want you to do this, I was just stating my opinion. I’m going to keep in touch and watch this journey of yours as it progresses, dropping comments (which hopefully won’t sound as negative) whenever I can.
Wish you the best and good luck! Let’s enjoy the weekend and get down to business Monday.
I’d love your STRONG opposite opinions about my strategies. Keep on posting nice weekend you too.
for sure 70-80% chance of winning, triple digit returns, without even looking at a chart, now i am impressed and very interested. drop some more hints please!
i would be over the moon with 60% in a month (60% of what exactly?) (and, no, i don’t think trading news or gap / session opens will acheive this return, either). personally, i don’t think it is a 50-50 game. what is the saying? 95 % of traders loose? so i think it is more like a 5-95 game. 70-80% sounds good but i assume it must have the risk reward ratio to make it work?
Yeah thats big time. Maybe thats why he has been so condensing with a lot of new people here and calling them names.
You should post some proof of what u claim so we can worship u correctly.
sorry mods Im not looking to start a war but just some of the way that some posters have been shot down is bothersome. Tearing one down to make self better is not the way to go. the name of site is baby pips so there will be questions. Why should they be ridiculed. JMTC
I’m with ForexForte on this one. Finding a set of rules during normal trade conditions is tuff enough but during news… good luck to you bro. I love news trading but have given it up. Smashing my head into a brick wall is more fun than that.
[QUOTE=“pabloroacho;700153”] for sure 70-80% chance of winning, triple digit returns, without even looking at a chart, now i am impressed and very interested. drop some more hints please! i would be over the moon with 60% in a month (60% of what exactly?) (and, no, i don’t think trading news or gap / session opens will acheive this return, either). personally, i don’t think it is a 50-50 game. what is the saying? 95 % of traders loose? so i think it is more like a 5-95 game. 70-80% sounds good but i assume it must have the risk reward ratio to make it work?[/QUOTE]
You’re right it’s not 50-50, a little less because of the spread/commission and other costs. And the 50-50 ratio I applied was to each trade taken based on technical analysis, not your chances of being a losing trader so no the 95-5 doesn’t apply here. Technical edges aren’t that bad.
70-80% with usually a 1:2 ratio, sometimes more sometimes less, but I never took a trade worse than 1:1. I have gotten triple digit returns multiple times when I was risking higher IE 5-10% and aggressively day trading. Now I can comfortably live life while risking 2.5% per trade due to account size and still manage 70%+ win ratio.
Oh and I never said I didn’t look at charts, I said my entries aren’t based on reasons from a chart. What that means is I do use charts as a road map for entries and exits, however I never enter the market because of a chart or candlestick pattern.
Dropping hints, hmm… I don’t think there’s a need for dropping hints because I can tell people exactly how to make a high probability trade and they still won’t get it. Trading is a skill, not something that I can just hand over. It takes time to learn like any other skill or trade. Without my understanding of markets, you cannot make the trades I do.
I made a post somewhere and wrote out almost everything that causes a change in price in different time scales. That’s a massive hint right there. Now learn about the structure of price and look into market microstructure. Read academic papers on foreign exchange markets, and read them multiple times because you won’t get it the first time (you can skip the math mumbo jumbo; not needed for your purposes). Learn about trading order flow and liquidity. Look into the EMH theory and figure out why markets can never be fully efficient. Look into behavioral finance and learn how TA and FA strategies on their own can be very deceptive. Look into metagaming and using market participants strategies against them. Look into finding exploitable market inefficiencies and start building edges around them. This is all assuming you already know all that basic TA and FA styles and terms.
You see, most people won’t make it because they are too lazy to do all the required work. There is a lot of effort required into learning the skill of trading, and most people just don’t want to put that much effort in. You go to school for years and spend tons of money while working hard as hell to become a doctor or a lawyer. Why should trading be any different? Some of the really dedicated ones will get there. You just need to focus on the right knowledge, the boring and less flashy knowledge. And you definitely need to be able to think for yourself and realize what information out there works, and what is BS.
[QUOTE=“3xfx;700155”] Yeah thats big time. Maybe thats why he has been so condensing with a lot of new people here and calling them names. You should post some proof of what u claim so we can worship u correctly. sorry mods Im not looking to start a war but just some of the way that some posters have been shot down is bothersome. Tearing one down to make self better is not the way to go. the name of site is baby pips so there will be questions. Why should they be ridiculed. JMTC[/QUOTE]
Condescending? Hahahah.
I can just imagine having told my superiors the same thing after all I put up with. You know what they would tell me, “Sorry to get your knickers in a knot, didn’t realize you were on your period. There’s the door, now get **** out!”
Dude you think being torn down on a website is bothersome? Try working on a trading floor. You wouldn’t last 5 minutes. Try working at a brokerage, see how many times you get cursed out. Don’t believe me? Ask institutional traders yourself! And I never meant to tear down any posters, sorry if it came off that way. I have strong opinions and I like to debate them. It’s this type of environment I’m used to and now that I’m trading my account, Babypips has replaced that for me because trading is a lonely business. Sorry you can’t handle it but get over it.
Don’t worry dude, my past will repeat itself and I’ll be here for probably a few weeks and then be gone never to be heard from again. Sure, let’s just say I’m on here to boost my already massive ego. I don’t care because the traders here thinking trading will be easy and they’ll be rich in a month are making a mockery of my business, why shouldn’t I make a mockery of them? And since you couldn’t make it past the condescending part of the posts, did you once stop and realize the value my posts contain? These aren’t made up things I’m talking about, they are actual truths about market operations and that’s why no one can argue and tell me I’m an idiot and don’t know anything about trading. But it’s okay. I really don’t care about the majority of losing 95% crowd. In fact, I hope you keep losing so I can make a good viable income. What I do care about is the small few stuck in that 95% who are almost there! They are committed and want it badly, they’ll do whatever it takes. I know cause I was there. If what they need to push them over that wall to join the winning side is the posts I make regarding markets, then I have done a great thing no matter all the crap you want to give me. What am I getting in return? My ego massively boosted? Lol you think I need to post on a forum ****ting on traders to do that? Good joke bro…
I need to show you some proof? Are you serious? I need to give you my track record and credentials? And what do I get in return? No 250K/yr salary. No 1mil+ bonuses. So why the hell would I give you that? I’m not here to sell anything. I’m not here to gain a following. I don’t give a damn about being worshipped. Let me repeat that in the open forum for everyone to read.
I DO NOT MENTOR. I WILL NOT TRADE YOUR MONEY. NEVER MESSAGE ME ASKING ME TO TEACH YOU OR TRADE FOR YOU. I DO NOT ANY OF YOUR MONEY. I AM NOT A GURU. I DO NOT NEED A CULT FOLLOWING. AND I HAVE NOTHING TO SELL TO YOU.
I am here spending my valuable time writing up posts trying to get traders to think outside of the normal technical/fundamental box to realize how price and markets actually functions, and now I need to prove myself even though I get nothing in return? That is just about the dumbest thing I’ve heard here so far, and trust me there’s been plenty. I am here willing to help traders, I never asked for a cult following or your approval, so don’t ask me to prove myself.
I want the whole forum to know that you should take everything I say with a grain of salt. If I say I’m making x amount, don’t believe me I don’t care. I wouldn’t either. However, at least look past that and at the actual information I post regarding markets. That is the stuff you need to think about, not whether I’m making this much or that much. Otherwise you’ll continue to be a losing chump in the game wondering why you can’t win until you come up with some crazy conclusion that markets are rigged and cannot be beaten.
well I guess I hit a nerve. Its my opinion take it how u will. this isnt a trading pit nor brokerrage house.
I have worked for Janney montgomery scott. in the late 80s
i also have been on trading floor at ny merc coffee coca ans sugar.
but this site is called baby pips. people that come here come for help not to here someone beat his chest cause he doesnt get attention at home.
Like I tell my ex. Ill let u have the last word. cause im sure u need too.
I said what I feel. Im not gonna be feeding into u.
green pips.
[QUOTE=“3xfx;700273”] well I guess I hit a nerve. Its my opinion take it how u will. this isnt a trading pit nor brokerrage house. I have worked for Janney montgomery scott. in the late 80s i also have been on trading floor at ny merc coffee coca ans sugar. but this site is called baby pips. people that come here come for help not to here someone beat his chest cause he doesnt get attention at home. Like I tell my ex. Ill let u have the last word. cause im sure u need too. I said what I feel. Im not gonna be feeding into u. green pips.[/QUOTE]
Lmao an online post hits my nerve? It’ll take a hell of a lot more then that to hit my nerve. I’m not some pansy unlike what I’m portraying from you… Learn to not be so serious.
People come on here for help? What do you think my posts are giving them? I’m sorry you’re stuck in your world of condescending that you cannot derive that from my posts. But you know what, you don’t like it, oh here’s the best part, you don’t have to read them! Just ignore me for all I care. I’m not the one *****ing about something you said to somebody else and then resorting to typical muppet behavior of show me proof!
Hah, good one. “I’ll let you have the last word.” You know, that’s just like what girls say when they have nothing to say back when they know they are wrong. Except they don’t say that phrase, they say “oh whatever.” That’s what I get from you, you can’t debate with me, so you have to make one last stand and leave. Well good riddens and green pips for you too, sirry.
my humble opinion…
if i make a post saying i have a no loss system because i will (reverse) martingale or cost average loosers, please feel free to make appropriate comments. i am trying to study to find any workable system in trading, and news seemed to be an opportunity within the system. upon further study, it appears to me that, unfortunately, the edge of trading news is negated by spreads and slippage etc. i do not feel i have been offended or condescended by anything in this thread.
i am looking for an edge. the thread was about no loss news trade.
my issue with 50-50 is that trading is clearly not 50-50. i don’t believe 95% of traders are idiots with money to burn, or that none of them ever tried technical analysis or had any trade discipline. if i asked you to a game of coin toss and somehow you lost 95% of the time, you might come to the same conclusion.
so, i am starting to think there is no opportunity in forex, and someone on a forum says they have a for sure consistant 70-80% win rate and triple digit returns a month and their entries are not based on charts. wow! great, please tell me more…
then i am told i could be told exactly how to do this but i wouldn’t get it, probably because i am too lazy. hmmm.
if you have a good system in forex, that’s great, i am happy for you and it is nice to think that money can be made at this game by someone.
please tell us what do you base your entries on? if you have a great system, please tell us what the system is. i don’t need proof or every detail, just some indication as to some way that it may even be possible to have a true edge and workable system. so far, i am yet to be persuaded that any system truely has any better than the “50:50” chance that you started with.
This post?
http://forums.babypips.com/newbie-island/73781-breakout-question.html#post700053
and this is an example?
http://forums.babypips.com/newbie-island/73707-ideal-range-pips-per-time-frame.html#post699497
Necessary in my opinion.