Trading on NEWS

I am finding Great Success trading on news…the spikes are huge…it seems much easier then using technical indicators…anybody have the same success?:slight_smile:

I guess you’re referring to the NFPs today? They worked out right this time. But have a look back at NFPs in previous recent months - often they spike all over the shop, bust people’s stops and then close near to where they were 10 minutes before.

They do this for a few months, everyone gets sick of trading news, then you have good spikes… swings and roundabouts.

In my experience anyway… but glad you’re enjoying them at the moment!

Yes they are nerve racking…its like being in a glass room and someone is pumping money into it and you are trying to grab as much as possible before it shuts off…i mainly trade the us news that seems to always be the most profit…since the US ecomoy is gloom and doom lately any good news gets the spike and anything bad gets it worse…its kinda of a win win situation, i have been in this for about 4 months now…averaging 50 to 80 pips a week…not bad for starring at a computer for about 5 mins a pop…just wanted to get peoples feedback…thanks for the advice

We can make both directional trades and volatility trades in forex trading. But most retails traders only know about directional trades and ignore volatility trades, which is a waste. Whenever there is NFP announcement, it is a good day to place volatility trades before the announcement.

Forgive my ignorance but what does NFP stand for?

NFP - look in ‘tools’ section on this site for friday 6th june. Non-farm payrolls, funny name for unemployment figures in the US, released first friday of the month. Unemployment increased and the us dollar went down instaneously on release of the figure.

There’s a strong case for disagreement on that point. Most “retails” traders know about both “types” of trades (look at Forex Peace Army’s site for a sampling), and a great many take trades to benefits from the volatility present around more noteworthy releases, foremost of which is the NFP.

In fact, many - but certainly not all - novices (most retail traders) turn to news trading to compensate for lack of technical ability, analytical depth and to minimize time-opportunity cost (e.g. 15 minutes surrounding a release v. several times that trading in a different manner). And many of them get killed while doing it because they don’t know what they are doing, and don’t realize that retail brokers have made modifications to their platform to make success with this type of trading low probability.

Straddles and other entry strategies that worked a couple years ago are much more difficult to pull off now. In fact, for the beginning trader, placing trades pre-release, particularly NFP, is - usually - an especially bad idea. Dynamic spreads (where applicable), placing stop levels too close (or too far away), lack of contingent order types (One Cancels Other, etc.) and volatility swings have produced much of the incessant complaining (it’s [U]always[/U] the broker’s fault) and disenchantment you find represented on the FPA site and elsewhere.

Taking trades in the wake of a news release after event volatility has subsided and price has resolved itself into a discernible trend is a great idea; but exploiting news-related volatility spikes is not: at least for the newbie trader.

I’ve tried trading on news (fundamental analysis) but it never worked for me… it was always kind of 50/50 if the news had any effect at all. And sometimes it would go the OPPOSITE way. Maybe if you combined technical analysis and fundamental analysis and only trading when both agree you could be right the majority of the time. Personally I ignore the news altogether and trade only on technical analysis right now.

if i wanted to trade news, can anyone recommend a site where I can read the news, know when the releases are, and know what effects the news may have on prices?

Watch Bloomberg TV streaming through your web browser. Plus subscribe to some of the more prominent financial podcasts.

Most major retail forex news outlets have an economic calendar (such as that here at babypips under the “Tools” tab) that lists basic event data: name, time/date, previous value and a gauge of the volatility typically surrounding the release and the analyst consensus concerning what the value of the upcoming release will be. FxStreet, for example, also includes a few extras: graphs, links to related news and a description of the release and whether a positive or negative reading is bullish or bearish for the pair it principally impacts.

As for knowing what effect news will have on prices, if you want more than “a positive report is positive for X/Y pair” such as forecasting, you’d have have to look elsewhere.

All said with the caveat that correct forecasting of a release’s figures and even the relative impact of that figure on the market is only half - if that - of the challenge of trading the news.

Trade the news provides a very good release service at reasonable cost. Make sure you are a very accomplished trader before you attempt this and be aware that many professional traders stay away from these areas which should tell you something about their difficulty

There is another way to trade volatility, and then is using binary option trading. Trader can choose to trade OUT before the data announcements.

I hope the adminstrator will not delete off my link, as I’m trying to share my view, and that link is important.

trader123… i’d love to hear your views, please share them with us in the forum. But when it comes to linking, please read the forum rules…

http://forums.babypips.com/newbie-island/announcement-forum-rules.html

Thank you.

Speaking of the news calendar here on babypips, when does the calendar get updated? And, why do I get an “Object Error” alert after I click the Tools tab?
Thanks :slight_smile:

Tell us more about it…those who are curious enough will find your site on your profile, as I did. I am familiar with fixed odds betting on financial markets (though as a U.S. citizen, I’ve never participated). What you’re referring to as an “Out” binary option trade sounds like a bet that a currency pair will be out of a certain range by a certain expiration time - stake and odds determine profit and loss, similar to a long call or short put, where your stake (premium) is the maximum amount you are capable of losing. But you aren’t trading spot forex or anything else, in this case - you are betting.

wouldn’t one simply enter a position an hour or so before a news release, hedge it, and therefore lock in the low spread costs and then simply menage both trades by placing appropriate stops right before the release… sure it can backfire but maybe it can work… I learned this technique form a seasoned trader but never got around to actually do it since I am not fundamentally-literate yet… and speaking about fundamentals… can any one tell me where I can get the news releases directly???

Where can I get access to all the live fed speeches???

how is NFP published??? on the BLS site at the designated time only?? or is it also presented on CSPAN???

I personally feel trading the news is very risky, and can be a greater risk then trading trends or ranges. I try to not trade news, because a lot of times it is air, and it can vanish as fast as it can inflate. The spreads definetly go ‘hay wire’ during this time which can work against you, and no matter what the forecast maybe it is too much of a risk to try and trade. Trading forex succesfully is limiting risk. I have a self developed system that gives me 73% accurracy, and I never trade around the news or right after it. I just wouldn’t recommend it.

I subscribe to a free news service that is offered by two people who are part of the forex peace army group, called Sir Pipsalot and Crazy Kat. You can probably find a link on the forex peace army site. Each day they send (free) an analysis of upcoming news announcements for the day and how best to play them. They also include a link to a video which gives more in depth information.

Although I do not trade the news, I am interested in how different announcements affect the various pairs and I find these daily updates very useful to learn the correlations. A couple of times, I have actually made trades based on the information given and have done well :wink:

In a trading course I have, they suggest if you want to trade news, to wait for the first 15 min candle to close after the announcement. Based on the news and its affect on that first candle, you can often enter the trade and collect some pips in a much less risky manner. :cool:

News Trading is risky… Like any investment, there is always a risk, and trading the news is no different. The potential profits are huge but the losses are also equally as large. So it is really very important to be very cautious when participating in this kind of trading. Successful news trading depends solely on how you get your news.

Bloomberg is one of the leading global providers of data, news and analytics. Watch their latest news announcements and read latest articles here:Bloomberg.com: Audio/Video Reports