Hello everyone. I do trade news. So 5 minutes to the news release I use to place the trade with either buy stop or sell stop which has been working for me. But my last three trades has been tragedy which my trade will go with my buy stop or sell stop, but I do stopped out of the trade telling the trade was closed by gap. More experienced in this can you please enlighten me on this and what possible solutions. Some of the trades are in this below picture.
u
Do you think you should be trading news? How did you decide to trade news this particular way?
Yes. Is a straddle strategy which has been working for me
As a straddle I take it you set a buy stop and a sell stop above and below price so that whichever way price moves you will be riding the move.
Are the orders one-cancels-the-other (OCTO), so that if the buy stop is triggered, the sell stop is cancelled?
Or does the untriggered order stay live and if triggered becomes a hedge for the first order triggered?
Are there any stop-losses and how do you identify the prices where these are set?
Exactly one triggers cancel the other. It has been working fine with me until of recent
So if price rises the buy is triggered and the sell is cancelled. But if price then falls where is the stop-loss?
TP 10 pips
SL 5 pips
If buy stop triggers I don’t cancel sell stops immediately until the buy reaches its TP and cancel the other sell stop. At times you get stopped with spikes and win the second trade with break even.
Still yet you haven’t answer my main question
Closed by gap suggests price moved very quickly so that the firm’s systems were unable to execute your exit order at the price you set. When that happens they execute it at the first available price, and this means that your loss is greater than what you had calculated as your maximum loss on that trade. So you cannot calculate precisely how much you are risking per trade if your positions are particularly subject to price gapping.
Price gapping happens more often when entry, TP and stops are very close together. Its also more common when spreads widen to much more than the normal quote, such as around news announcements etc. Its also more common when price movement is subject to rapid movement in both directions as the market players attempt to assess the impact of new information, such as news announcements etc.
In summary, with each straddle trade you make around news it is like you are running fast and jumping over a large fire. You should make it most of the time but the few times you don’t make it will hurt you really badly. Each bad loss could be much worse than each normal win. So one very bad loss could wipe out many normal wins.
If you have found someone who is doing these straddles across news, study how they’re doing it very closely. Especially find someone who has been doing it successfully many many times.
Good luck.
1 Like
Thanks for the info