Red News Hedge Trading + EA
This trading strategy is based on taking advantage of high volatility in the market due to high impact red news. In this strategy, we open two trades on two different currency pairs which are known to be correlated (positively or negatively). For example, we open Long positions on both EURUSD and USDJPY a few seconds before a high impact red news in the hope of earning some pips from any imbalance in the basket. I have written an EA that makes it easier to trade this strategy. Attach the EA to one of currency pairs' chart (for example, EURUSD), and enter the hedge currency pair symbol (for example, USDJPY) in the input settings of the EA. There are four buttons to open positions,
1. Buy/Sell: the EA opens a Buy position on the attached chart, and a Sell position on the hedge currency pair.
2. Sell/Buy: the EA opens a Sell position on the attached chart, and a Buy position on the hedge currency pair.
3. Buy/Buy: the EA opens Buy positions on both currency pairs.
4. Sell/Sell: the EA opens Sell positions on both currency pairs.
and there are three buttons to close the basket manually. You can specify the net take profit (in money, not pips!) in the input settings of the EA.
Positively Correlated Symbols
For a pair of symbols that are positively correlated (such as AUDUSD and AUDCAD), use either Buy/Sell or Sell/Buy button.
Negatively Correlated Symbols
For a pair of symbols that are negatively correlated (such as EURUSD and USDJPY), use either Buy/Buy or Sell/Sell button.
Forex Correlation Table
Here is a website where you can find a Forex correlation table,
AUDCAD ~ EURAUD
AUDJPY ~ AUDNZD
CADJPY ~ AUDJPY
How I trade with this strategy:
1. Choose a high impact red news of a major currency, for example AUD.
2. Choose two other major currencies to pair with AUD such that the absolute correlation of two pairs is greater than 0.5, for example AUDUSD and AUDCAD.
3. A few minutes before the news release time, look at a currency strength meter to observe which of above two currencies (USD or CAD) is more powerful.
4. Select a trade button according to both the sign of correlation (this can be automatically done by the EA for you), and the strongest currency you identified in the previous step.
See an example here:
How to load history data for hedge symbols?
In order to load history data of hedge symbols, you can follow the steps below:
1. Hit <F2> key to bring up History Center window.
2. Select the symbol (for example, EURUSD).
3. Click on <Download> button.
4. Repeat 1 to 3 for all symbols you want to load history data.
1. In this thread we discuss only the strategy and the EA presented here. I will IGNORE anyone who writes any irrelevant post in this thread.
== Update 2019-09-14 ======================
Ver. 1.84: An Experimental Currency Strength Meter (CSM) is added to the EA. Recompiled with MT4 build 1220.
Note: The CSM needs your broker to provide all major currency pairs to work.
Input settings description:
1. Select Auto Time Based Action:
- Auto Trade Disabled (default), This option disables auto time based trading.
- Buy/Buy: This option makes the EA to open BUY/BUY positions at Auto Action Time.
- Sell/Sell: This option makes the EA to open SELL/SELL positions at Auto Action Time.
- Buy/Sell: This option makes the EA to open BUY/SELL positions at Auto Action Time.
- Sell/Buy: This option makes the EA to open SELL/BUY positions at Auto Action Time.
2. Enter Auto Action Time (broker time):
- yyyy.mm.dd hh:mm:ss, for example 2015.11.19 14:29:30
- The EA opens two positions at this time according to Select Auto Time Based Action setting.
3. Auto Button Selection?
- If enabled, the EA hides irrelevant trade buttons according to the correlation value between two symbols.
4. Hedge Symbol:
- Enter hedge symbol as exactly as it appears on the market watch of your MT4 platform.
5. Net Take Profit (money):
- When net profit becomes greater than this value, the EA automatically closes both positions.
6. Net Stop Loss (money):
- When net profit becomes less than negative of this value, the EA automatically closes both positions.
8.1 Lot Size: 0.1 (default)
8.2 Hedge Lot Size: 0.1 (default)
9. Slippage (points): 30 (default)
10. Magic Number: 1122 (default)
- If you want to use the EA on the same symbol twice or more, you have to assign different magic numbers. Otherwise, leave it default.
How to install this EA on your MetaTrader4 Platform
For newbies, here is a video on youtube that shows how to install any EA on MetaTrader 4 platform in 5 easy steps
Thank you for your Ea Math
have placed it on Usdjpy chart with EURUSD to hedge and clicked Buy/sell button , it opened 0.1 Usdjpy and 0.08 Eurusd
may i know why it opened 0.08 in EURUSD ? , will it calculate the perfect hedging lot size ?
And you're right! The EA calculates lots to equalize the worth of one point of both currency pairs. I uploaded a new version (v1.10) with an input to let the user enable/disable this function.
Other than EU with UJ which will be the best pair?
For today's USD red news, I may go SELL/SELL for both symbols EURUSD and USDJPY.
Any more progress? anyone trading with this ea? i got profit buy buy EU and UJ
Version 1.15 of the EA released. In this version a bug in auto closing the hedge basket is fixed. I updated Post 1.
Thanks for the EA,... truly I need the clear tutorial when to apply BUY/SELL , SELL/BUY, SELL/SELL or BUY/BUY,....
May be you have better clear hints how to determine that operation.
Looking forward to have answer from you,...
Where is is version 1.15. need to download.
Still Ea not closing trades at desired profit , kindly have a look Math Thank you
We have to accept what market gives us
As of now the results with this Ea are very good , even we can use it for Scalping
have to test it few more days
leave the trader to chose the option of Buy/sell or Sell /Sell
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