I wonder why it is that you don't appear to trade the news the way that the Institutions and (ex-) Floor traders do?
I traded the GU on the UK Manufacturing PMI this morning.
I traded it long for 15 pips (an Undercooked trade i.e price not reflecting the new post news fair value).
Then I traded it short off the spike high (an Overcooked i.e. price more than reflecting the new fair value) for another 10 pips.
I wish I had stayed with that 2nd trade because it just kept going.
The best 3 out of 4 good news trades ALL require you being able to calculate the new fair value based on the news announcement.
You can :
1. Trade the pre-news positioning by the big boys - all completed BEFORE the news comes out.
2. Trade a Contra (enter before news and exit after news) when too big a pre-news price move means that the news forecast is over factored in.
3. Trade and Undercooked or Overcooked ( entry and exit both after the news).
4. Trade a short term pullback in the impulsive move after a big news release.
All of those have high to decent strike rate and good to amazing Return to Risk.
But hardly anybody teaches them!
I traded the GU on the UK Manufacturing PMI this morning.
I traded it long for 15 pips (an Undercooked trade i.e price not reflecting the new post news fair value).
Then I traded it short off the spike high (an Overcooked i.e. price more than reflecting the new fair value) for another 10 pips.
I wish I had stayed with that 2nd trade because it just kept going.
The best 3 out of 4 good news trades ALL require you being able to calculate the new fair value based on the news announcement.
You can :
1. Trade the pre-news positioning by the big boys - all completed BEFORE the news comes out.
2. Trade a Contra (enter before news and exit after news) when too big a pre-news price move means that the news forecast is over factored in.
3. Trade and Undercooked or Overcooked ( entry and exit both after the news).
4. Trade a short term pullback in the impulsive move after a big news release.
All of those have high to decent strike rate and good to amazing Return to Risk.
But hardly anybody teaches them!