DislikedI think algorithmic trading can be milked for profits when it does the wrong things. Just take a look at the price fluctuations that rubber-band back in milliseconds but I think it is still risky despite the fact you can profit 90% of the time because you have no idea where to place SL. Imagine if you are trading a H1 breakout and the algorithmic trader spikes your SL by 50 pips in one second . This can often be a problem if you use SL (unless you do a scripted hedge trade). Personally I don't think algorithmic trading is too powerful at the moment...Ignored
It is true that trading the news is risky and a spike can eat you up.
And, it is also true, that you can quickly get rich on the news,
as one of my friends has proven just today by making 100 Pips on EURUSD.
I must acknowledge that one of my scripts played a very important role in this trade.
However, there is a simple solution, as always, to minimize the risk.
It is all about when you Enter.
True, there was no spike on the news, today.
But, let's consider the EURUSD M5 chart as it was before the news, today:
Let's assume we are simply trading without any checking of higher Tf's like D1 & H4.
From my point of view, I have the session Open Line and my candles.
I see a lot of Yellow Candles, which means that Price is fluctutaing around SMA(50)C.
So, the direction is not certain.
Assuming I would choose Long on the Dark Green Momentum Candle, because Price would have been
above both of the visible Lines (their color would have been Green) , I would have most probably
been taken out by SL on the Dark Red Momentum Candle. Nothing special, just trading.
This time I would have to place a Short order.
And, that's it.
If I hadn't closed early, which would be rather doubtful, because Price did not move a lot,
I would have most probably closed my 20 Pips normative.
That would still have been before the news.
I mean, I am very happy for my friend to have made a 100 Pips, today!
However, that is not what trading is about!!!
Trading is about having a strictly defined strategy, and realising this strategy like a machine.
Which also includes zero emotions, both positive and negative.
So, there was an unusually big move on the EURUSD and other pairs, so what?
If you happen to get lucky, because you were in the right direction at the right time,
and the Price made 93 Pips in 5 minutes, good for you! You get an extra bonus.
There is nothing to get excited about. It was just confirmation of the fact that you were doing the right things.
I wasn't even looking at the EURUSD, today.
I was doing my thing on DAX30.
I made over twice my daily norm.
I was only doing my thing.
Trade the facts, not opinions.