PPI Market Order Long - Who Actually Does This?

Trading Discussion
1

Hey guys,

PPI will drop at 2Pm today. I noticed last CPI made EUR/USD surge immediately.

I expect this time to be the same. YOLOing a market order long EUR/USD at PPI drop. Do you guys do this?

  • How many pips SL you usually run?
  • Where you taking first profit?

Or is this just a good way to blow an account?

Very humble here trying to assess if people actually take this risk and how…

Thanks a lot!

2

Your certainty about the direction is “interesting,” but you’re mistaken about the scheduled time of the announcement.

It’s definitely that. It’s reputedly the single commonest cause of account-loss (which I don’t find hard to believe at all).

I’m sure many do, yes. (Otherwise how could it be the single commonest cause of account-loss? :wink: ).

The important thing to know about trading this type of “news” is that it’s terribly easy to get the direction right and still have an expensive outing into the markets, because there are so often spikes in both directions, spreads are colossally wide, and your broker may not be able to honour you stop-loss, in which case you may effectively be trading unknowingly using your entire account-balance as stop-loss.

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3

Ah sorry yhea 2.30PM indeed!

Thanks for the complete and understandable answer! I’ll follow your caution advice

4

Made money or lost?

5

There is a longer time-frame version of news trading. It’s on the D1 time-frame and entries are delayed so wide spreads and volatility should not be a major problem.

The strategy came from company share trading - on the day of annual results release, buy at the close today if the close is higher than yesterday’s close / sell if lower than yesterday’s close.

Obviously, you could delay entry even further for greater confirmation by waiting until the day after the figures were released and comparing that close with the close the day before the release date.

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6

I did not entry, I just continued my usual setups which worked moderately today on EUR/USD :slight_smile:

I am trying to assess whether I can amplify gains with news but above comment is right for sure, I’ll avoid this in the future!

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Very, very wise. Great judgment. That will spare you some future problems, risks, distractions and time-wasting! :sunglasses:

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8

Can you tell me how to predict the direction before news?

9

No, but that’s not the point.

The points are that nobody else can, either, and that even if they could, trying to trade the news would still be the single commonest reason for “unexpected” account losses among retail forex traders.

Do you know why, @shanmugapradeep ?

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10

Because of Spread, slippage, stoploss hunting, and All brokers are market maker?

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11

All true, but I think not really the main reason and not things that would cause sudden “unexpected” loss of your account.

I think the huge risk that commonly destroys accounts is trading without a stop-loss, and that’s effectively what you’re sometimes, very unpredictably and unknowingly doing, if you trade the news: sometimes the broker - even an honest one! - really can’t honour your stop-loss. That’s how so many people lose their accounts.

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