I think it definetly affected the charts:
EUR/USD
I use Babypips. It’s updated automatically without having to refresh and is pretty fast.
i would suggest trading the economic calendar instead of watching the news all day. I saw this first hand this last week when I went short on the GBP/EUR with a really good candle setup. However I never checked the Economic calendar and 20 minutes later the BoE released the intrest rate for The GBP. It shot up more than 25 pips within 5 seconds. And later this week I noticed the same happen with the USD when the non-farm income figures were released. The USD shot up at least 20 pips. The thing is we never know if it will go up or down.
A great setup for this would be to set pending trigger orders on both buy and sell signals, and set S/L levels just above/below the previous averages. this way it will trigger the direction of the price when the news gets released. However, sometimes the price will quickly move in one direction and then shoot up in the opposite direction so if that happens the other pending order will trigger and you can still exit your other trade with a profit.
In closing, I think there is still reason to watch political news as the USD is the most traded currency, I think the bigger impact of election news will have more power in the USD price movement. Another big news price mover would also be extreme weather and natural disasters. an extreme of this would be in 2000 when the AUD lost almost half its value due to a huge drought.
I monitor the Prelim UoM Consumer Sentiment report, which is released monthly. On occasion, the “actual” report will be far enough off the forecast for a trade to be executed.
In the last 17 months, only 4 good opportunities for a trade have popped up - maybe tomorrow, Friday, October 14th, 2011 at 9:55 AM ET, will be a good shot at a scalp or 2.
4.0 or more off forecast could maybe catch the market off-guard.
Coming up tomorrow, the 18th of October, 2011 at 9:00 AM ET, is the USD Net Long-Term TIC Flows. This report is released monthly by the Treasury Dept.
Since I started watching this report in May of 2010, (actually much earlier than that) I have traded 5 times during 4 releases, all 5 were winners.
Of the 12 releases I watched, there were 9 good triggers - this report may be worth watching.
I use a trigger of 10B and trade the USD/JPY.
Personally, and I may be wrong, but I think I have a better chance of winning money at a casino then trading the news…the big guys (hedge funds, banks etc) will always know the news before us and they will use it to their advantage
I believe one of the first books I read when starting out talked about “riding on the back of the big boys” - in other words, the big boys are using the news to their advantage - I know that - all I need to do is “hop on their back” and ride along, since they are doing what I believed they would do.
If they see the news is bad for a certain currency, odds are they will sell that currency, and if that is the case, maybe I should sell as well. Just stands to reason. Don’t you think?
On occasion, the US will release a news report that is good for a trade, one of these reports is the Core Durable Goods Orders report and Durable Goods Report being released tomorrow, Wednesday the 26th of October, 2011 at 8:30 AM ET US.
I have traded this report 10 times in 6 releases since February, 2010 - 8 wins - 2 losers. Done right, this can be a good trade, the odds say so!
I use a 1.5% difference from the “forecast” report of 0.5%, and I am set up to trade the GBP/USD currency pair - this pair has proven better most of the time in the past.
That is, both reports need to come out in the same direction, if they are in conflict - I stay out.
Thanks for the feed back people. But there are actually some good news to follow, i mean another FX “Guru” said, that it’s pretty sure to follow national bank reports and forecasts, full net of them.
During this economic turmoil domestically and around the world, one of the more important economic news releases is the employment change and unemployment rate - not only in the US, but in Canada as well.
Tomorrow, Friday the 4th of November at 7:00 AM ET, Canada is releasing their Employment Change and Unemployment Rate. Both of these reports are forecast as negative for the Canadian economy.
I will be setting up for a possible trade of the currency pair CAD/CHF using a difference of 20K above or below the 20.3K forecast.
The unemployment rate is forecast at 7.2% - an increase of 0.1% from last month.
Of course, these 2 reports should not be in conflict and should exceed the forecast enough to surprise the trading market.
Might be fun to watch, maybe trade if conditions are good.
Awhile back, I posted on the Baby PIPS Forum the economic news release of the European German ZEW Economic Sentiment.
This news report is good , at times, for a small “scalp” trade, or 2.
I am set to trade tomorrow, Tuesday the 15th of November at 5:00 AM ET US.
I have a video posted on You Tube showing my set up and trade of the currency pair EUR/USD - 2 trades, 2 wins.
This video may be of some interest to you - here is the link:
If you have been watching the financial turmoil going on in Europe, you may be wondering if the failure of the EURO, or forecast of its failure will affect the USD during certain US news reports.
Tomorrow, Monday the 28th of November at 10:00 AM ET, the US Census Bureau is scheduled to release the New Homes Sales report.
The last 6 monthly reports have not been very eventful, but, it appears that the decline in the EURO is favoring the US Dollar with even minor positive New Home Sales.
Last month, with only a positive change of 13K higher than the “forecast”, the EUR/USD moved down (in favor of the US Dollar) for 51 minutes about 110 PIPS.
Last month I was set-up to trade the USD/JPY using a “trigger” of 30K, so I did not trade. This month I will watch the EUR/USD and mentally figure in a trigger of 15 K or more (positive report).
If Germany is not able to persuade the European Central Bank to “ramp up its government bond purchases”, the EURO could collapse.
Could be fun to watch!!!
Tomorrow, Tuesday the 6th of December, 2011, at 7:30 PM ET, the Australian Bureau of Statistics is scheduled to release the Australian Gross Domestic Product report. This has been a good economic news release for a trade or 2.
I started following this news report back in December of 2009, and only
since August of 2010 have I traded. I have traded 3 releases with 5 trades, all have been winners.
Tomorrows report shows a “forecast” of 1.2%, the “previous” is 1.2% - no prediction of an improvement for the Canadian economy - but, if the economist predictions are off by a mere 0.2%, good or bad, certain currency pairs should move.
I am set up to trade the AUD/NZD currency pair. The 2nd minute into the report is probably the best time to enter a trade if there is a good trigger.
I like it dude. I don’t give a rats tooshy what the others say… your thinking about this the RIGHT way. you are measuring, testing, tracking… etc. You are realizing probabilities, and only taking things into account (at least in your example) when a large degree is change is “predicted”… and it seems you intuitively know that large degrees of anything are harder to accurately predict than small degrees of something.
Therefore your betting on a classic fundamental mispricing and sentiment surprise, which if you have the data, you can miss 50% of the time, and likley make a profit in the right conditions, if played correctly and carefully.
kudos dude, your the first I’ve heard of who I have heard of who MAY develop some sort of actual edge based off news releases (or maybe u have already…don’t really know from what you’ve posted)
Personally, I like to look for more frequently occuring, higher probability edges than what you’ve described… that are closer to the fundamental mechanics of the market, rather than based on less frequently occuring “catalyising events”…
But nevertheless. I like it. Rock on man. If you don’t have it yet…this type of approach will likely get u there soon.
Jay
P.S. Hmm… turns out this post is more than 1 page long, and u DO have what you were looking for. Again, kudos.
P.P.S. Your also my new, (and in fact first and only!) News trading hero. Man…something about news based trading i just absolutely abhor! I love the news, it helps me fill my tech. analysis based limit orders, but news trading itself? Gross! However,
much respect. just goes to show (yet again) that any information is tradeable, and 99% won’t get it anyway.
The problem with news trading is that your are basically waiting until the move has already happened. I have stopped trading short term like this, for the most part.
hmmm… seems the move took a little while to occur here in the example the OP gives:
"Upon the report release, the currency pair AUD/JPY moved down for 17 minutes about 73 PIPS - right direction.
The currency pair AUD/NZD moved down for 6 minutes about 86 PIPS- right direction
The currency pair AUD/USD moved down for 39 minutes about 90 PIPS- right direction
And, the currency pair EUR/AUD moved up for 39 minutes about 115 PIPS- right direction"
It seems that for him, he has an idea of what the market expects…and he has an idea of what he will do if those expectations are not met. he has a pretty good time frame to enter, and he can speak for himself here, but I suspect that if such news occurs, and IMMEDIATELY moves by say, 100 pips in less than 30 seconds, he would simply move on the the next trade, as it moved to fast for him to enter, and therefore, was an invalid setup.
I suspect he has a price he is willing to get in at, after the news announcement is made. Say, maybe, within 10 pips of where price was the moment the news came out. If he misses his entry, so be it. I trade technical, and miss entries regularly. Maybe he does to.
I think he’s looking to the news as a potential catalyst. Any thing that would be a “surprise” to the market creates an opportunity, and if the market doesn’t immedieatly react much, he can get in and exploit this “gap” between sentiment change and price change.
I’m sure most of the time this type of explotation does not exist. And when it does, it seems that the OP trades it.
Jay
Tomorrow Canada’s Ivey Purchasing Managers Index is being released again by the Richard Ivey School of Business.
That is, Thursday the 5th of January, 2012, at 10:00 AM ET USA, this report will be released.
Since June, 2010, I have traded this news report about 10 times with mixed results. The market does move when the “actual” is outside the “forecast” by a good amount - it has just become hard to figure out which direction the market will move.
I have posted this news report on the Baby Pips forum in the past, matter of fact, on Tuesday 09-06-11. Check it out!
Today I am providing a link to a video for the trade set-up, 2 trades and the results - 1 win and 1 loser, here is the video link.
News Reports - FOREX Trading Canada IVEY PMI 03-04-11- - YouTube
This is the first time I have posted this news release on this forum. I have been monitoring and trading this ADP Employment change since about January, 2010. About 13 trades were executed - let me say - this is not an easy release to trade.
Tomorrow, the 1st of February, 2012, at 8:15 AM ET, the forecast is 189K, down from last month of 325K - not good for the US economy.
I am looking for a difference of 50K from the forecast - so, if the actual comes out at 239K or higher, I would sell the currency pair GBP/USD, or, if the actual comes out at a 139K or lower, I would buy that currency pair.
That is, when the broker spread has gotten back to normal.
Could be a tricky trade!!!
This is the first time I have posted this news release on this forum. I have been monitoring and trading this monthly news report since 2009.
I have traded 13 of the news releases, had 17 wins and 13 losers.
I will be set up to trade the currency pair USD/JPY, looking for both reports either good or bad for the US.
The forecast on the calendar I use is not good for the US economy.
you’ve been lucky, same as going in a casino and picking red correctly. You might then pick black correctly