Hi all senior, junior and newbie guys, when I back to my thread after weekend, saw some new posts, thought some one may have posted some important things to make strategy more batter but uhhhhhhhhh! all posts are related throwing Atom missile to each other. he he he. Its okay 
Lets get down to the business Tuesday there are lots of big impact news and I am going to trade according to my strategy and I than I will post result here with explanation. Some guy on this thread was going to collect some data about last 1 year news history, I am waiting. pabloroacho you said that spreads and slippage are minus point for news so you can place orders few minutes of news releases. ForexForte how are you? how did you enjoy weekend seems you are alone!
hi Tom
np. sry, i got side tracked, someone said he had 70-80% win rate so i tried to find out about that. looks to me that he was trading news after the news release, and was trading low impact news⌠which makes sense. fine, no problem, no big secret.
its building permits mom today.
from what i understand of your strategy, you would be better off just placing the one order after the release.
the last building permits wasâŚ
Apr 16, 13:30 Building Permits (MoM) High Impact 1.09M 1.08M 1.04M
looks to me like it was, on eurusd, approximately 400 bp up in the first minute and 400 back down again in the 3 minutes after that.
you will trade eurusd for this or something else?
best of luck, cheers.
Did u catch it?
May 19, 13:30 Building Permits (MoM) High Impact 1.04M 1.06M 1.143M
May 19, 13:30 Housing Starts (MoM) Medium Impact 0.93M 1.02M 1.135M
Both better than expected.
[QUOTE=âpabloroacho;700636â] Did u catch it? May 19, 13:30 Building Permits (MoM) High Impact 1.04M 1.06M 1.143M May 19, 13:30 Housing Starts (MoM) Medium Impact 0.93M 1.02M 1.135M Both better than expected.[/QUOTE]
You still donât understand that when I said a little less than 50-50, I was referring to trades based on technical analysis and NOT statistics of how many people lose in forex.
Please carefully read the following link: Behavioral Finance: Key Concepts - Gambler's Fallacy
Now after reading that you should realize that even if you lost 95% of the time, you still have a 50-50 chance of calling the right side of a coin flip. Itâs not 95-5, itâs 50-50. It will always remain 50-50 no matter what has happened in the past, nothing will change that. Taking trades based solely off of TA is the same, but a little worse due to spreads and commissions. If you go long off of support on the 1Hr EU chart, your chances of that trade winning is 50-50 because it can either go up or go down as far as you know. You have no idea which way itâll go, except you hope support will hold rather than break. But why wonât it break? You donât know except thatâs what the books tell you. And now you are a blind TA trader. A support does not mean price canât pierce straight through it. Support does not automatically make price reverse. What does make price reverse is order flow. If more buying orders are clustered at that support then selling orders, it will hold. So how can you bump up your chance of 50-50?
Well say some data that the market is focused on from the U.S. came out below expectations. This will cause a bullish shift of sentiment in EU and now you have additional factors that should make that support hold besides just support. This bumps your chances up. However if that number was still really really good, even though it didnât meet expectations it can still cause price to break through the support after the initial euphoria. It just matters about what market participants are thinking and what future orders they will enter.
And itâs not just about data either. Itâs anything and everything that can cause price to move. Itâs all about future order flow, whether thatâs TA, FA, stop hunting, option plays, even profit taking, etc etc.
Now youâre taking what I said out of context. I said that MOST people are too lazy to put the work in to figure out how markets work. I never said YOU. I donât know you and therefore I canât make such a blanket statement. However, I should add that I wrote that long list of what you must study in order to get the correct mindset to be able to be highly selective of your trades and only take high probability trades, yet you completely ignore that and focus on my laziness comment and then ask for my entries and system. Not doing yourself any favors are you?
I can tell you I went short today near the broken support/new resistance with a 1:1 trade because of the negative shift of sentiment that carried during London session due to Greece fears and good USD data hitting the wires with a stop above the resistance and TP right beyond the next support level, but what good does that do you?
Like I said, you need to develop the correct mindset and you need to learn how markets actually work.
And no, trading the news after it comes out is not the correct way of trading my strategy. I trade order flow, not news. I have plenty of other market inefficiencies that I can exploit as well. Yes that was the right post, yes that can be an example of ONE trade. That is not the only high probability trade I can make. The things each trade I make have an in common are a price driver, thought out analysis, and some assumptions. There is no do x if y happens, followed by managing the trade with z.
If I get a chance throughout this week Iâll show some trades I make and some of the reasonings behind them. Maybe then, youâll get an idea of why my strategy works.
[QUOTE=âaidysproule;700482â] Necessary in my opinion.[/QUOTE]
Thanks for the backing, kinda rare to find here and I agree.
[U]For the rest of you[/U], people here donât understand Iâm trying to get you to think outside of the box. Itâs great you guys come up with these strategies, but you have to realize theyâve all been thought of before and wonât work because you cannot curve fit markets. If it was that easy, weâd all be rich and trading would be a dying career because weâd bleed the banks dry. Iâm just trying to cut your time to becoming a profitable trader.
Iâm speaking from experience. Iâve been through these strategies. I know they rarely work and even if they do, once market conditions change they will die out. Iâm trying to get people to start learning how markets really work so you can develop strategies that will last for a long long time. And what do I get for it? A bunch of crybabyâs who canât put two and two together to realize what my posts are trying to convey and think Iâm being an ass. Well whatever, like I said Iâm only here to help the small few who are almost there and just need that push. I donât know who they are, but I know they are out there, I know they are dedicated, and I know theyâll put the hard work in to figure it out because I was there once.
The rest of you I donât give a rats ass about, sorry.
Anyways Iâve had so much time to post recently because I was having some work done at the house, and so I traded lightly and stayed out the office. Now my game is back on so Iâll maybe chime in if I can add anything. Iâm sure that will make a lot of you happy.
[QUOTE=âtom magar;700490â]Hi all senior, junior and newbie guys, when I back to my thread after weekend, saw some new posts, thought some one may have posted some important things to make strategy more batter but uhhhhhhhhh! all posts are related throwing Atom missile to each other. he he he. Its okay Lets get down to the business Tuesday there are lots of big impact news and I am going to trade according to my strategy and I than I will post result here with explanation. Some guy on this thread was going to collect some data about last 1 year news history, I am waiting. pabloroacho you said that spreads and slippage are minus point for news so you can place orders few minutes of news releases. ForexForte how are you? how did you enjoy weekend seems you are alone![/QUOTE]
Hey Tom,
Iâm doing great, how are you? Sorry for completely hijacking your thread man I didnât mean for that to happenâŚ
Oh and donât worry Iâm not alone. I actually had quite an amazing weekend, hung out with my girl a lot, plenty of drinking, eating out, being out, and some really really nice alone time haha.
When I said trading is a lonely business, it is. Being at the office with no one around and even if someone was around, they would have no idea about this trading thing you are blabbing on about, it can be really boring. Profitable retail traders can attest to that. Iâve thought about turning my firm to prop, but in the area I live in nobody knows what forex is (except some dude from CA) and Iâm not really a boss type. However, I live a very lively life at home. The money from this business makes life very fun and itâs worth putting in the hard work to make it.
Tell me about your weekend.
Also, you said youâll be trading this strategy Tuesday. What news events will be your main focus? Although itâs not for me, there are many ways to trade and I canât wait to see your results and we can compare the price movements that happen tomorrow to ones in the past and see how the pips align across each pair.
Good luck and happy trading!
Check out the article âHow To Trade Forex Risk Freeâ at fxkeys [dot] com . (Google the title.)
[QUOTE=âAbsolutely;700678â] Check out the article âHow To Trade Forex Risk Freeâ at fxkeys [dot] com . (Google the title.)[/QUOTE]
Dude, did you even read your own link? Iâm not trying to be a douche, but any experiences trader can see past that flashy risk-free title jazz.
Let me post some of the key quotes I read straight from the beginningâŚ
âThis is not the first time I am talking about LIMITING your Forex trading risks.â (Big difference between risk-free and limiting)
"âŚlet me tell you that there is risk in everythingâŚ" (Oh so now there is no such thing as risk-free???)
Let me sum up the article.
All it says is that open a live account after demoing, make money and only trade with the money you made because essentially it is risk free. Here is where that logic faltersâŚ
What if rather than making money on that live account, you lost it? Welp, all that risk-free bull just got flushed down the toilet. Also, just because youâre trading only profits you have made from trading, doesnât mean there isnât risk of losing that profit, and losing that profit is losing money you spent TIME and WORK making. That opportunity cost could have been spent doing something else that would be bettering yourself, and therefore that is what you risked and lost.
Good try, but youâll have to do a hell of a lot better than thatâŚ
Like I said from the beginning, there is risk in everything.
As traders are jobs are to minimize the risk while maximizing profits. Whatever way you do that, itâs up to you, but there is absolutely no way to eradicate risk completely.
This could be the most dumbest âstrategyâ I have ever come across, my friend⌠You are probably just starting your journey in the FX market. No risk, no loss, NEWS TRADING - already sounds like a catastrophe. You can try out your strategy, but only on a demo account, I beg you, do not even think of live experiments. Frankly, Tom, NEWS trading is the riskiest thing on Earth, it full of traps and market makers tricks with only one thing - to get you out of your hard earned cash. You have to understand the news, the perception of the news by market, etc. etc and all the other things/factors which Forex Forte absolutely correctly listedin his post - even that will not guarantee you from taking a loss. Just do not waste to much time defining your no risk no loss news trading methodâŚ
hi fx taipan,
yes and no! mostly, i agree with you, butâŚ
news trading definately has a lot of issues as you correctly state. do i think itâs dumb strategy? no, i think it probably was a great strategy, just not so much any more for all reasons you have correctly stated.
News Makes the Forex Market Move
no risk, no loss⌠ok, maybe that is getting a bit silly, but, i presume no one trades in order to loose money so, in a way, any strategy worth having will be âno lossâ overall. no risk? ok, i give up there, lol, but, if you open both a buy and a sell and sit through the news then you are guaranteed no loss and no risk! [you are guaranteed to only loose 2 spreads, and no one ever seems to actually count spread into any calculations (!)]. ok, that is a bit dumb!
lastly, whatever kind of trading someone does, news is there and is a fact of life. avoiding news is probably almost as tricky as trading it, i would guess. how do you not trade news?
dear forexforte
i agree with almost everything you say, so please donât be quite so harsh, or make out i am an ignoramus with some vested interested in not listening to what someone says in response to a question i tried to ask them.
my opinion is that if you are a really great, disciplined, technical / whatever trader then you may approach a 50 50 game⌠but mostly this idea of 50 50 in forex / trading, not your specific particular trade, is, imho, a fallacy.
what do a lot of traders do? they open a buy or a sell and set a sl and tp. the sl is close and the tp is far, so you get your equal to or greater than 1:1 rr (donât forget spreads and everything). well, do that with both a buy and a sell at the same time⌠chances are both trades will hit their sl and fail. how can that be, itâs 50 50 and i bet both ways and still lost on both. a coin toss where heads you loose, tails you loose. then add in the spreads, slippage, âmarket makers traps and tricksâ, etc, and that is why i think trading is 5 95, and applies to both individual trades and traders as a collective whole. but hey thatâs just what i think.
just my humble opinion and perspective on it, and it really is of no importance if anyone agrees or disagrees.
secondly, if i catch anyone on a forum saying they have a fantastic win rate and/or returns, i will call them up on it. in a world where bs scam high win rate sure fire eaâs and systems and courses are everywhere, either it is more bs or someone actually has something worth looking at. numbers like that are easily skewed, and even if they are not, there is not, as you say, any reason to think that you will necessarily get the same rate in the future, maybe it was a lucky streak in 50 50 land, or the trend stops, the market changes and the system fails or whatever. i trawled through your posts to find what you were refering to and to try to see how you traded. why would i ignore your reply? why post that you could explain but donât. your massive hint didnât seem to be anything very new to me, maybe i didnât get it.
âNow 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 wonât 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.â
yep, did all that already. it donât tell me what your 70-80% win rate is based on. and i donât think a degree in astrophysics is required to trade. einstein was a smart bloke, he said make everything as simple as possible and no simpler than required. what is occamâs razor? the simplest explanation is probably correct and make as few assumptions as possible.
blah blah âbut what good does that do you?â well⌠it tells me that your reasons for entries are on the charts. news can be whatever and sentiment can be whatever and the price can and will still do what it likes regardless. the reasons that you state for the trade are the results of the news releases.
i am curious as to what you are refering to as order flow. my understanding is that order flow information is not available for forex market? idk. my simple understanding of this is as follows. news is gonna come out. a bunch of orders comes in to close trades before the news release by customers that donât want to be exposed to news volatility risk. another bunch of orders comes in for buys and sells by customers taking a position on what they think the news outcome will be. on top of that, there are more customers trying to jump on the news as soon as it has come out. dependant on the order these are executed, the price may be influenced. if the news is as expected, the price spikes either which way, as price is bought up and sold back down or visa versa, as this glut of orders is filled. in a stronger news impact, i would guess this all gets blown out of the water or may show as a retrace to some degree. i dunno, feel free to enlighten me.
âIf I get a chance throughout this week Iâll show some trades I make and some of the reasonings behind them. Maybe then, youâll get an idea of why my strategy works.â
⌠awesome !!! that would be really cool and very much appreciated, i look forward to studying your trades. thanks. THANKS.
i really am interested in the trading and not who has the biggest thingy.
ps. my thingy is non-existant. i only trade demo and blow up as many accounts as those that i double. if and or when i find anything better, i will be happy to openly post about it and my results. unfortunately, i am not a complete idiot, donât have money to burn, donât believe in most of what ppl say because the field is somewhat swamped with bs and salesmen for 90% systems with unbeleivable(!) returns, and i would guess a lot of traders have brilliant strategies until next month when somehow it all disappears again.
[QUOTE=âpabloroacho;700725â]dear forexforte i agree with almost everything you say, so please donât be quite so harsh, or make out i am an ignoramus with some vested interested in not listening to what someone says in response to a question i tried to ask them. my opinion is that if you are a really great, disciplined, technical / whatever trader then you may approach a 50 50 game⌠but mostly this idea of 50 50 in forex / trading, not your specific particular trade, is, imho, a fallacy. what do a lot of traders do? they open a buy or a sell and set a sl and tp. the sl is close and the tp is far, so you get your equal to or greater than 1:1 rr (donât forget spreads and everything). well, do that with both a buy and a sell at the same time⌠chances are both trades will hit their sl and fail. how can that be, itâs 50 50 and i bet both ways and still lost on both. a coin toss where heads you loose, tails you loose. then add in the spreads, slippage, âmarket makers traps and tricksâ, etc, and that is why i think trading is 5 95, and applies to both individual trades and traders as a collective whole. but hey thatâs just what i think. just my humble opinion and perspective on it, and it really is of no importance if anyone agrees or disagrees. secondly, if i catch anyone on a forum saying they have a fantastic win rate and/or returns, i will call them up on it. in a world where bs scam high win rate sure fire eaâs and systems and courses are everywhere, either it is more bs or someone actually has something worth looking at. numbers like that are easily skewed, and even if they are not, there is not, as you say, any reason to think that you will necessarily get the same rate in the future, maybe it was a lucky streak in 50 50 land, or the trend stops, the market changes and the system fails or whatever. i trawled through your posts to find what you were refering to and to try to see how you traded. why would i ignore your reply? why post that you could explain but donât. your massive hint didnât seem to be anything very new to me, maybe i didnât get it. âNow 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 wonât 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.â yep, did all that already. it donât tell me what your 70-80% win rate is based on. and i donât think a degree in astrophysics is required to trade. einstein was a smart bloke, he said make everything as simple as possible and no simpler than required. what is occamâs razor? the simplest explanation is probably correct and make as few assumptions as possible. blah blah âbut what good does that do you?â well⌠it tells me that your reasons for entries are on the charts. news can be whatever and sentiment can be whatever and the price can and will still do what it likes regardless. the reasons that you state for the trade are the results of the news releases. i am curious as to what you are refering to as order flow. my understanding is that order flow information is not available for forex market? idk. my simple understanding of this is as follows. news is gonna come out. a bunch of orders comes in to close trades before the news release by customers that donât want to be exposed to news volatility risk. another bunch of orders comes in for buys and sells by customers taking a position on what they think the news outcome will be. on top of that, there are more customers trying to jump on the news as soon as it has come out. dependant on the order these are executed, the price may be influenced. if the news is as expected, the price spikes either which way, as price is bought up and sold back down or visa versa, as this glut of orders is filled. in a stronger news impact, i would guess this all gets blown out of the water or may show as a retrace to some degree. i dunno, feel free to enlighten me. âIf I get a chance throughout this week Iâll show some trades I make and some of the reasonings behind them. Maybe then, youâll get an idea of why my strategy works.â ⌠awesome !!! that would be really cool and very much appreciated, i look forward to studying your trades. thanks. THANKS. i really am interested in the trading and not who has the biggest thingy. ps. my thingy is non-existant. i only trade demo and blow up as many accounts as those that i double. if and or when i find anything better, i will be happy to openly post about it and my results. unfortunately, i am not a complete idiot, donât have money to burn, donât believe in most of what ppl say because the field is somewhat swamped with bs and salesmen for 90% systems with unbeleivable(!) returns, and i would guess a lot of traders have brilliant strategies until next month when somehow it all disappears again.[/QUOTE]
Good. A nice long detailed post shows youâre trying.
First of all, sorry, I didnât mean to come off as harsh. Thereâs a reason why I come off that way and Iâll finally explain it. You see, when youâre trading on the institutional level putting 80-100 hours a week in, you can easily see how stressful this job becomes. Trading is not easy to learn and itâs bad enough to give you plenty of wrinkles and graying hairs doing it. A reason why you see the managers on the trading floor being rough to the juniors, cursing them out and calling them names when they mess up is because itâs stressful to be treated like that. But if you canât handle the stress, you wonât be cut out as a trader and itâs filtering those traits out. The ones who can remain calm under the stress have a much higher chance of making it. Likewise, if you canât handle my attitude then I donât see a reason to try and teach you. Itâs a cold world out there and youâre up against the best of the best. You have to be able to remain calm and disciplined under stressful situations while being aggressive and dominant in your trading. Itâs a negative sum game, those who can handle the pressure will be out on top. Sorry, thatâs just the way the business is. I donât think youâre too dumb, I donât youâre too stupid, I donât think you donât have what it takes to make it because I donât know you. I do know that if you canât keep your cool when things go wrong (and when youâre dealing with money the institutionals do, thatâs huge), youâll have a really hard ass time being a profitable trader.
Next, I agree with you that if you trading is a 95-5 game, not 50-50. But you have to get past the fact that I never said trading was 50-50. Once again, I said technical analysis based trades were a little less than 50-50, probably around 40-60. Market maker âtrapsâ (what the hell is a market maker trap exactly?) and what not donât have to affect that. You think if I was a 4hr trader and bought at each support level with a 1:1 (hundred pips mind you) following the macro situation that I would lose 9 out of trades? Really? What if I was following this down trend on E/U Daily (because of strengthening US data while the ECB commits to QE) selling at resistance on each pullback, you think that I would lose 9/10 trades? Because that chart will tell you a whole different story. But thatâs irrelevant to our main discussion (although if you really believe youâll lose 95% of your trades while only winning 5% of the time I donât get why youâre trading; youâd need a 1:9 R/R and win the first trade just to BE).
Iâm glad you take everything I say with a grain of salt. Please do because if you listened to every chump who said that, youâd get scammed out of your money before placing that first trade. Besides, I already said I donât want people to get hung up on what numbers I claim. Forget that part because itâll help you in no way knowing what my win ratio and returns are. Iâve also stated, that I donât want peopleâs money or have anything to sell and I have approached nobody about selling them something or trading their money.
So you learned all that already? Really? You did all that? Tell me why I highly doubt that. If youâve done all that then you would realize how this strategy is bound to fail. You would realize that you can win trading, it doesnât have to be 95-5, you just have to find market inefficiencies to exploit. If youâve learned all that you wouldnât need me to explain my strategy to you because you would go out there and build your own highly probable strategies (notice the multiple strategies) to exploit the various market mechanics. You would also not refer to what a market maker trap is as a market maker trap. The reasons I state are for news releases, because my frame of time depends on news releases to move price around. But it can also be large stop hunts occurring or profit taking if times of mixed sentiment, or a plethora of other reasons. On lower time frames, there can be other reasons pushing price around, but in not a low timeframe trader anymore. Once you gain this understanding you realize there are multiple ways to take a piece out of the market and thatâs not just news trading. Sure news can be whatever and sentiment can as well and price can still act crazy, but I never said 100% win ratio did I? I never said I win every trade did I? I said I take HIGH PROBABILITY trades. Price will usually fall in line with sentiment because thatâs where the order flow will push it. I just need an edge, Iâm not looking to win every trade.
Make everything simple? Really? Yeah, because you can totally come into trading and after 3 months be living the dream. Weâre all totally millionaires and that 95% losers statistics is some made up bull****⌠Come on man. Do you really think I can go up to any random hobo on the street, give him a scalpel, and expect him to perform surgery? Just gotta keep it simple right. You donât have to go to school for years to learn that. Just make the cut, fix the problem, and sow them back up right? Like really man? How do you expect to become a profitable trader without learning how markets work? How can you place high probability winning trades without learning the foundation of markets? You donât need knowledge of astrophysics to be a financial markets trader, but you damn well need knowledge of financial markets!
No, there is no level 2 information in Forex. But that doesnât mean you canât make assumptions based on what types of traders are in the market and use their own strategies against them. Thatâs why you need to learn the microstructure of markets! During news events there are more then three things going on. Okay, volatility is low because participants are sidelined. People who wanted to trade pre-news already entered earlier and have positions on. Once the news hits the wires, the news flows pour in. But what about stop hunting before the news? What about when the news comes out near expectations? What happens then? Forget the news. The news doesnât matter, what does is order flow. I know that if news comes out near expectations, markets have been efficiently priced and participants wonât be entering orders based off that news. What happens if itâs above/below expectations? What happens if itâs above expectations, but still a ****ty number compared to what the Fed was looking for? These and much more are things you need to think for yourself about. Iâm not going to hold your hand and spoon feed you through everything. You need to use your brain and figure out what will cause future orders, then you need to build a strategy around exploiting those future orders and then just trade. Sorry, I didnât spend all that time and hard work to learn this stuff just to give it all to you. Do your own work, there is no free lunch.
I have already given you plenty to think about. This time, actually look into what I already told you to. It will take time, even years, to decipher the important information and then learn how to use it in trading on a practical sense, but if youâre dedicated enough then youâll make it. If youâre not, then thatâs one less competitor for me to worry about whose lazy and not cut out for trading anyways. I wasnât here to share my strategy and tell you what I do. I was here to show why this strategy the thread is about would probably not work and trying to point people the right way to what they need to learn in order to build successful strategies. Letâs not make the focus all on me.
Iâll try to post trades here and there, but when Iâm trading my attention is solely on trading. Donât get hung up on the fact I MIGHT post trades if/when I can and feel like, and certainly donât expect it. I advise you to take what Iâve said and do whatever you want with it, but now letâs return the attention of this thread back to the OPâs original point.
ok cool no problem.
in replyâŚ
ok cool yep i get that. email and forums do tend to lead to escalating miscommunication. np.
yep, sorry about the 5 95 thing, i was being contrarian, sorry. all is not as simple as we are lead to perceive. the post is about a straddle, you canât loose right? but throw a big slip in and a whiplash, general unpredictability and all the rest, and you most certainly can loose, and by more than your stop loss said by a long shot.
yes, sorry, i do beleive in simple. a straddle is a beautifully simple idea. i could teach a hobo the basic idea in maybe 10 minutes. yes, the devil is in all the detail, and it is much more complicated than that. likewise, say, moving averages. trading is already made complicated so adding complexity is not desirable, and presents the problem that i cannot replicate someone elseâs life time of study and work or complicated system.
pessimism aside for a moment. when i started studying mt4 and trading, i looked at a variety of the standard existing systems and watched the prices, mostly for gold. i kinda discovered a few of the basics. i noted a fairly predictable spike in price at 1:30 pm my time, every day. just happens to be the 8:30 am est ny open / news release time. next i was in some free live trading room looking at eurjpy and while the guy is saying donât trade now, this is what we are going to do, the price went through the ceiling in a single minute bar⌠and then proceeded to retrace, all in about 15 minutes. more movement than the whole of the day. i think i can manage to be focussed and concentrate for about an hour at a time. i know longer time frame has advantages but it is hard to ignore the news phenomenon short term impact. generally with gold price, it will do whatever you dont want or expect it to do. and the other failings of cutting winners and letting loosers run etc. renko kinda removes the decisions but has its weakness too. i recently watched a video that said a study demonstrated TA doesnât work.
on top of that, when you look at systems and averages etc and you see their weaknesses and how they become very complicated, and get killed if the market changes, trust in any mechanical system becomes very low. if it isnât mechanical then it is some kind of fine art and i am most likely to be in the 95, even if it is 50 50, i will play till i loose.
but, i do think with study, news can be the making the decision for you, but yes you have to grab the thorns of all that the market will throw at you. so far, nfp is starting to look too thorny but other events may just be liquid and predictable enough to make some profit. the beauty of a straddle, there is no real decision to make, buy or sell. the temptation is gonna be to bet on the retrace or continuation after the initial impact.
looking at the news yesterday, just the american news, it seemed to me to be of a predicatble size similar to previous. spreads did spike correspondingly but some brokers were much better than others, and a normal spread value was available almost right up to and shortly after the news spike. (note to self to further investigate fixed spreads). seemed to me as long as you are not placeing a trade in the spike it wouldnât be very significant. unfortunately, if itâs a pending order straddle, i will be placing an order exactly in that spike and probably hitting a gap at the same time.
today i am hopeing to watch the cad news and the crude and fomc later. (note to self to get round to writing the ea that is gonna place my straddles and decide how best i might skin this cat so i can start some back testing. which leads to tick chartsâŚ).
all best wishes and get rich soon!
yes. i see when we trade with news. it is a 50:50. when you correct you can make money with it. i trade with news sometimes. i usually avoid. when i has order i will follow the news. when i do not has order. i will wait it.
A few interesting things I want to add for today.
First of all, as a Forex trader you do not need to worry about crude inventories. That data is usually for the futures traders who trade oil contracts and it wonât play any major role in the FX markets.
Next, I was feeling particularly bearish intraday today on E/U (my usual trading pair) as there wasnât really any data during the London/NY overlap that could affect the current sentiment. I believed the sentiment was bearish because of the ECB bond-buying QE and Greece conundrum. Now I could of jumped on that bias and made a quick 20-30 pip profit today, BUT forget focusing on the coulda woulda; here is the important part.
I didnât enter the markets because my knowledge of markets led me to believe that liquidity may not be that high because of the upcoming risk FOMC event. This could lead to a low volatility enviroment with unpredictable volatility spikes since a lot of market participants are sidelined. In fact, there were a lot of technical traders who shorted on a pullback to the 1.1125 area and had their stops hunted.
Now I could of taken the trade and won, but what if I was one of the people who had my stop hunted? What if volatility just dried up and price didnât reach my TP area? Knowing the current liquidity structure in the markets due to my understanding of financial markets is what keeps me being highly selective of my trades and taking the near A+ trades, and that is how I can achieve 70-80% win ratio.
Now lets talk about the FOMC. In fact, I pointed out how wrong his news straddling strategy could go to Tom Magar (OP) way earlier in the thread:
âYes, there are some news releases where it wasnât enough to change market participant perceptions or wasnât 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.â
Thatâs almost exactly what happened.
But why? Well this meeting was pretty much about a potential June hike liftoff. The meeting minutes showed that most of the Fed members were against a June rate hike. This caused the high-frequency traders algorithms to buy on the news, followed by news spike traders, followed by price chasing traders. You could have made money if you exited early enough, but how do you decide on when that is? But why did price turn anyways? Leading up to the minutes, due to the current weaker than expected data traders had priced in a rate hike wouldnât happen until December. So when the meeting minutes showed that most of the Fed members didnât want to hike rates in June, it wasnât anything new and there were no new orders to sustain that up move. So with liquidity dry on the downside, we quickly saw price overshoot down and hit stops on its way. News straddling would put you in some bad positions right about now. Price moved back to near the range because this FOMC meeting minutes didnât show any new information and therefore there was no strong one-sided order flow to move price. There was no reason for the limit orders sitting at the support and resistance levels not to hold because it wasnât enough to change the marketâs perceptions after this news event. It was a no trade day for me today, and if you were to ask me should I go long or short now I would say I donât know because there is no high probability direction to trade in. I also think volatility will end up falling since itâs NY afternoon, so there is no reason to be trading right now. Now you should forget about the I could of done this or should of done that and patiently wait for the next setup to analyze. If it seems like a high probability trade, take it, if not then skip that one too. It pays to be selective.
I failed trading the news using pending orders or opening 2 positions in opposite directions etc.
What worked was trading BEFORE the news. It only works for red news with huge impact.
Eg, If market expect the interest rate to rise, CPI to rise etc, (you can check with different economic calendar forecast) then the price has high probability of going up few hours before the news.
THEN CLOSE THE POSITION BEFORE THE NEWS!!!
Thanks everyone for your input. some really interesting info.
buterfly, what if the news made price slip against you?
keanuryoves, why did you fail with straddles? and trade before news is good idea.
forexforte, thanks for the analysis and chart.
where is tom magar? you were gonna post an example trade?
i donât usually look very closely at fomc for some reason. you donât get a straight up number for it. but it looks like this one was worth looking at.
a quick reminder of toms strategyâŚ
"
- 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.
"
problem is the word âfeelâ.
with the fomc it looked like you could have made profit on both a buy and/or sell. and the liquidity was there for it.
previous months fomc minutes.
what the crude news didâŚ
Well, Pabloroacho, under trading the news I mean trading right after the data has come out throught that session, trying to catch the initial reaction or placing pending orders right before the news time. Of course, you can not avoid not trading the news when you ALREADY are in the market based on your strategy/method. In this case you manage your position in the way to always MINIMIZE risk e.g. close some parts of your position if they are in profit or putting tighter stops. Sometimes the news are very good for your trades when the market quickly moves in your favour and reached target much earlier, this happens quite often too and I would regret closing my correct trades before some high impact news. But trading news genereally is a very TRICKY thing, normally its hard to tell where to take profit if there is one⌠Volatility, bigger spreads and other things are all against youâŚMarket makers like to fool around on quite obvious news, they like to reverse the market for some time quickly in oredr to kick out newbies or people with weak guts))).
From my own experience - it makes sense to trade only those high impact news which deviate considerably from the actual and forecast, in order to at least get some room for trade to go in a certain one direction. Trade surprises for the market in other words.