On www.dailyfx.com/calendar, actual data is released at specific times for the scheduled news events, this actual data could be used for making trading decisions with high probability. The trading system has to download the CSV data from dailyfx.com, which is updated when the news events are released.
For example, we have a news event ABC, that will be released at 1:30PM for AUD, with a HIGH Impact, and the forecast data is 4.9%
The EA will wait for 15min(or longer) after 1:30PM, and while waiting, the EA will download the CSV news data from dailyfx.com on a minute-by-minute basis, and determine if the actual data has been released. Once the data has been released and the actual data is 1.2%. The EA will know that the actual data is lower than the forecast data, which means weaker AUD. Since the news came out for AUD, the EA will trade AUDUSD, and since the data for the event shows that the AUD is going to weaken, the EA shorts AUDUSD.
The same process would happen if the actual data released, was greater than than the forecast data, and the EA would long AUDUSD, since AUD is expected to strengthen.
The risk/reward ratio will be 1:3, if the EA risks 20 PIP, it would expect to gain 60 PIP.
The EA would also have variable lot sizes, by comparing actual released data to the forecast data, and determining the percent difference. If the difference is large, the EA would open more lots, and if the difference between actual data and forecast data is small, the EA would risk a minimal lot size.
Would an EA of this type make sense in trading? Would it be difficult to develop something that would use this logic in trading the news?
For example, we have a news event ABC, that will be released at 1:30PM for AUD, with a HIGH Impact, and the forecast data is 4.9%
The EA will wait for 15min(or longer) after 1:30PM, and while waiting, the EA will download the CSV news data from dailyfx.com on a minute-by-minute basis, and determine if the actual data has been released. Once the data has been released and the actual data is 1.2%. The EA will know that the actual data is lower than the forecast data, which means weaker AUD. Since the news came out for AUD, the EA will trade AUDUSD, and since the data for the event shows that the AUD is going to weaken, the EA shorts AUDUSD.
The same process would happen if the actual data released, was greater than than the forecast data, and the EA would long AUDUSD, since AUD is expected to strengthen.
The risk/reward ratio will be 1:3, if the EA risks 20 PIP, it would expect to gain 60 PIP.
The EA would also have variable lot sizes, by comparing actual released data to the forecast data, and determining the percent difference. If the difference is large, the EA would open more lots, and if the difference between actual data and forecast data is small, the EA would risk a minimal lot size.
Would an EA of this type make sense in trading? Would it be difficult to develop something that would use this logic in trading the news?