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NFP straddle......What's wrong with this idea?

  • Post #1
  • Quote
  • First Post: Apr 4, 2007 8:15pm Apr 4, 2007 8:15pm
On friday, NFP day, I plan the following:

a. buy gbp/usd (10 lots) and immediately hedging it. Put limit orders on both orders for 20 pips.
b. buy eur/usd (10 lots) and do the same as above.
c. buy usd/chf (10 lots) and do also same as above.

d. these trades will be opened at the same time 3-5 minutes before news time.
e. I have enough equity to open all three trades at the same time.
f. My goal is to make $12,000 from these trades in a matter of minutes.


Ok guys, why should this not work? Forexfactory is a global community and we have about 48 hours to figure out why this won't work.

I welcome all opinions, advice, criticism wholeheartedly. We can make this work.


Kingmaker
your limit orders will get hit but your stops wont. thats what is wrong with this idea. this is the same thing as doing a straddle. this type of "hedging" is totally worthless, im not sure why brokers even offer it, and im even more baffled at why traders use it. its not even real hedging! its merely holding two exactly opposing positions, which is equal to no position at all! real hedging involved making a profit while holding two opposing positions.
Relax and be happy.
Geez Merlin, I took you 17 minutes to inform this member of your opinion.
What kinda back alley, fly by night operation is this?

Answer: the best one out there.
You don't post as often as I would like to read your stuff, but it's nice to know you're always watching over us.

Thanks Merlin. Greater than 20,000 strong and still responding to new members within 30 minutes. That is an Absolute WOW.

{BMc passes 10 Kudo chips to Merlin.}
I plan not to use a stop loss. Generally the spike following the news will take out one limit order. being NFP, the price will then retrace and take out the other limit order. I don't really see this as worthless. this is just for the NFP and 20 pip limit orders.

kingmaker
Quoting kingmaker
On friday, NFP day, I plan the following:

a. buy gbp/usd (10 lots) and immediately hedging it. Put limit orders on both orders for 20 pips.
b. buy eur/usd (10 lots) and do the same as above.
c. buy usd/chf (10 lots) and do also same as above.

d. these trades will be opened at the same time 3-5 minutes before news time.
e. I have enough equity to open all three trades at the same time.
f. My goal is to make $12,000 from these trades in a matter of minutes.


Ok guys, why should this not work? Forexfactory is a global community and we have about 48 hours to figure out why this won't work.

I welcome all opinions, advice, criticism wholeheartedly. We can make this work.


Kingmaker
Good luck with trading the news. I could not click the mouse quick enough, and my pending orders were filled with to much slippage. I made a little money but nothing to write home about.

Some say "The sky is the limit". I say "I own the sky".
KingMaker...please keep us informed if you used this technique on Friday and how it turned out.

Good Luck!
I was thinking of doing something similar.

Having two positions open ie Long and short the cable about 15 minutes prior to the report being released. Then at 8:30 close the order that is going the wrong way as quickly as possible. Let the winner ride for a bit and then close it.
Taking Life One Pip At A Time I officially have my own opinion.
@ Kingmaker


IMHO search for the BurgerKing Straddle Scipt here on the Factory and use this....thas much safer IMHO..risk reward 1:10 ..but u have to be fast and pm BK for a licence if u want use that much lots..also its not recommended to use more pairs at the same time..
just my 2cent
Quoting AidanPryde
@ Kingmaker


IMHO search for the BurgerKing Straddle Scipt here on the Factory and use this....thas much safer IMHO..risk reward 1:10 ..but u have to be fast and pm BK for a licence if u want use that much lots..also its not recommended to use more pairs at the same time..
just my 2cent
Ohh, I don't think 'Safe' comes into the picture here. This is a Scalper to the bone if I am not mistaken. {I don't have a Month to wait before I have Earned >$10k} I intend to leave all of you in my dust.

That's fine. Just as long as you leave your Funds behind to be distributed.
Quoting kingmaker
On friday, NFP day, I plan the following:

a. buy gbp/usd (10 lots) and immediately hedging it. Put limit orders on both orders for 20 pips.
b. buy eur/usd (10 lots) and do the same as above.
c. buy usd/chf (10 lots) and do also same as above.

d. these trades will be opened at the same time 3-5 minutes before news time.
e. I have enough equity to open all three trades at the same time.
f. My goal is to make $12,000 from these trades in a matter of minutes.


Ok guys, why should this not work? Forexfactory is a global community and we have about 48 hours to figure out why this won't work.

I welcome all opinions, advice, criticism wholeheartedly. We can make this work.


Kingmaker
And when the broker's site goes down, your plan is to.........
Great idea. Why are you only trying for 12k? I'd shoot in at least 50%. Let us know how it works.
Quoting Bemac
{BMc passes 10 Kudo chips to Merlin.}


thank you sir, i will spend them wisely
Relax and be happy.
Quoting kingmaker
being NFP, the price will then retrace and take out the other limit order.
LOL ok now you are just plain hoping! but go ahead and try it out, thats how ya learn!
Relax and be happy.
yes. certainly will try it out. the trick is to hedge in such a way that you have a 3-6 pip difference, 3-5 minutes before the news. The whipsaw alone might close both trades out before the actual news release.

Will post my results.

kingmaker
Just to add another variable to the equation, it's also important who your broker is.
With some brokers trading like this would get you screwed big time.
Others are more reliable, but this whole scenario is very risky.
well it was an eye opening experience. The results are in. They are as follows:
a. I entered 10 lots 3 mins before news only on gbp/usd and eur/usd. I went for 10 pips only.
So, I ended up making $4000.

The lesson I learned is that it will be very hard to do this on any other news day, except NFP. Limit to two currency pairs, and shoot for 10 pips.

finally, I think this will be a regular strategy for me on NFP days.

Kingmaker
Using the strategy i mentioned earlier i gained 5 pips
Taking Life One Pip At A Time I officially have my own opinion.
Quoting kingmaker
yes. certainly will try it out. the trick is to hedge in such a way that you have a 3-6 pip difference, 3-5 minutes before the news. The whipsaw alone might close both trades out before the actual news release.

Will post my results.

kingmaker

Good for you this time, but kids, dont do this at home

Somethimes NFP shoots in one direction and never goes back again, such as May, June 2006 as I remember. Then you have fill for 10-20pips in one direction, and a bad loss of about 100p 5min after the report. What you gonna do if you see 40k loss, and keeps going bigger?
Hi Kingmaker,

This is a system I used along time ago.

Sorry but its in GMT time as my trading platform runs in GMT

For NFP you take the high and low of the 12:30 and the 13:00, 30 minute candles and workout the high and low for this peroid

You then add 5 pips to the high and minus 5 pips off the low

Your stop loss is 5 pips inside the box, ie the original high and low

You can generally make some good pips with this, one guy I showed this too has made over a million dollars using this but then again he is very aggressive with his trading, and has a batting average of around 85%(that means he gets it correct around 85% of the time).

I personnally don't use this system anymore but it can give you somewhere to start with.

Cheers Go Getter
Go Getter When Trading Its All About "WHO YOU ARE BEING"
  • Post #20
  • Quote
  • Last Post: May 2, 2007 5:37am May 2, 2007 5:37am
Quoting kingmaker
well it was an eye opening experience. The results are in. They are as follows:
a. I entered 10 lots 3 mins before news only on gbp/usd and eur/usd. I went for 10 pips only.
So, I ended up making $4000.

The lesson I learned is that it will be very hard to do this on any other news day, except NFP. Limit to two currency pairs, and shoot for 10 pips.

finally, I think this will be a regular strategy for me on NFP days.

Kingmaker
Trading real or demo? Who's your broker? Chances are after they review your account and see you're scalping the NFP-they'll burn you.

If you really made 4000, take it and go on vacation. Unless you think your broker is going to sit back while you routinely withdraw 4000 from them...and not do anything about it.
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