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Predicting direction of economic releases

  • #61
  • Sep 10, 2006 1:24am Sep 10, 2006 1:24am
Making errors is human - we all make mistakes.

Improving the odds/ chances of not making mistake is by listening to all inputs no matter how small. Feeling the market (CNBC, Bloomberg) is a great tool. I myself do that as much as possible.

Perhaps the biggest mistake I made was GFT. I did not listen to a certain person who claimed GFT does not honor orders. I paid the price.

It is timely to bring that USA made a big mistake when their Intelligence did not listen to a 3rd world Intelligence report (Philippines). FBI/CIA shoved the report that terrorists would use planes for terror attack as early as 1996. We all know what happened 5 years later known as 9/11.

Bottom Line: Keep an open mind and listen to everyone no matter how small they may be. And in Forex, we traders are on the same side and should help each other.
  • #62
  • Sep 10, 2006 3:44pm Sep 10, 2006 3:44pm
How does the USA intelligence mistake relate to your blunder over GFT?

Military Intelligence is of course a contridiction of terms.
Trade what you see - Not what you think
  • #63
  • Sep 12, 2006 6:05am Sep 12, 2006 6:05am
<TABLE class=tborder id=post170118 cellSpacing=0 cellPadding=6 width="100%" align=center border=0><TBODY><TR><TD class=thead style="FONT-WEIGHT: normal"><!-- status icon and date -->http://strategybuilderfx.com/images/...n/post_new.gif 10-09-2006, 06:25:32 AM <!-- / status icon and date --></TD><TD class=thead style="FONT-WEIGHT: normal" align=right> #9 </TD></TR><TR vAlign=top><TD class=alt2 width=175>ngdaniel<SCRIPT type=text/javascript> vbmenu_register("postmenu_170118", true); </SCRIPT>
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</TD><TD class=alt1 id=td_post_170118><!-- icon and title -->Re: Predicting direction of economic releases
<HR style="COLOR: #ffffff" SIZE=1><!-- / icon and title --><!-- message --><!-- BEGIN TEMPLATE: bbcode_quote -->Quote:
<TABLE cellSpacing=0 cellPadding=6 width="100%" border=0><TBODY><TR><TD class=alt2 style="BORDER-RIGHT: 1px inset; BORDER-TOP: 1px inset; BORDER-LEFT: 1px inset; BORDER-BOTTOM: 1px inset">Originally Posted by Klaka
That truely is impressive,

did you trade on full 400:1 lots, or chose inbetween different lots and added 400:1 inbetween as your capital grew?
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The brokerage only allows 400:1 on a mini-account.

I've been told that leverage is 100:1 on a standard so I chose to stay with a mini-account until it grows to $50K when it is automatically converted to a standard account.

Check with your broker if this is something you are interested in doing.
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hi daniel

just spotted this on a another forum just wondering how far you got on the road to 50 k are you already there or half ,third just wondering
  • #64
  • Sep 12, 2006 9:13am Sep 12, 2006 9:13am
Almost there but am planning to split the account so I can stay with 400:1 but at 2 different brokerages.

Why do you ask?

Quoting superforex
<table class="tborder" id="post170118" align="center" border="0" cellpadding="6" cellspacing="0" width="100%"><tbody><tr><td class="thead" style="font-weight: normal;"><!-- status icon and date -->http://strategybuilderfx.com/images/...n/post_new.gif 10-09-2006, 06:25:32 AM <!-- / status icon and date --></td><td class="thead" style="font-weight: normal;" align="right"> #9 </td></tr><tr valign="top"><td class="alt2" width="175">ngdaniel<script type="text/javascript"> vbmenu_register("postmenu_170118", true); </script>
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</td><td class="alt1" id="td_post_170118"><!-- icon and title -->Re: Predicting direction of economic releases
<hr style="color: rgb(255, 255, 255);" size="1"><!-- / icon and title --><!-- message --><!-- BEGIN TEMPLATE: bbcode_quote -->Quote:
<table border="0" cellpadding="6" cellspacing="0" width="100%"><tbody><tr><td class="alt2" style="border: 1px inset ;">Originally Posted by Klaka
That truely is impressive,

did you trade on full 400:1 lots, or chose inbetween different lots and added 400:1 inbetween as your capital grew?
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The brokerage only allows 400:1 on a mini-account.

I've been told that leverage is 100:1 on a standard so I chose to stay with a mini-account until it grows to $50K when it is automatically converted to a standard account.

Check with your broker if this is something you are interested in doing.
</td></tr></tbody></table>




hi daniel

just spotted this on a another forum just wondering how far you got on the road to 50 k are you already there or half ,third just wondering
  • #65
  • Sep 12, 2006 9:27am Sep 12, 2006 9:27am
hi danial
I glad to hear that it a <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o></o>
<o> </o>

great confidence booster for us that’s only been doing it a short while
  • #66
  • Sep 13, 2006 1:41am Sep 13, 2006 1:41am
Quoting ngdaniel

Suggestions (not an endorsement): Read Business Week, the Wall Street Journal, the New York Times, or the Investor's Business Daily. Listen to Bloomberg Radio. Watch Bloomberg Television and CNN. Keep informed.

This is how I get advanced predictions before market volatility for an announcement. This works for me and it should work for you.

Please let me know your successes.
Pretty slick there ngdaniel.........yesterday morning (9/12 - 6:58 am CST), I read the following article on Bloomberg (1/2 hour prior to the US Trade Balance release): http://www.bloomberg.com/apps/news?p...refer=currency

I took a long market order position on the EUR/USD maybe 2 minutes b/4 release and ended up closing it manually 19 pips to the good in 1-2 minutes.

I will keep looking for these type of clues and track how I make out (I only demo'd, as it was my first attempt at trading this way...)

Thanks for the interesting idea,
Jim
  • #67
  • Sep 13, 2006 2:00am Sep 13, 2006 2:00am
Quoting learningtheropes
Pretty slick there ngdaniel.........yesterday morning (9/12 - 6:58 am CST), I read the following article on Bloomberg (1/2 hour prior to the US Trade Balance release): http://www.bloomberg.com/apps/news?p...refer=currency

I took a long market order position on the EUR/USD maybe 2 minutes b/4 release and ended up closing it manually 19 pips to the good in 1-2 minutes.

I will keep looking for these type of clues and track how I make out (I only demo'd, as it was my first attempt at trading this way...)

Thanks for the interesting idea,
Jim
I tell people that it works and people still tell me that it is hard to believe.

Keep on it.
  • #68
  • Sep 15, 2006 1:13pm Sep 15, 2006 1:13pm
There is just one another way to trade the news, 99%, it's almost foolproof.





Insider Information.

Anyone got any grandparents, or uncles in the FED, or in the SquakBox information processing centers?!

(Humor)

NGDaniel has a point, it will all eventually become intuitional anyways, so why pay, or straddle when you can get in before the spike and be right 80% of the time, based off your own skills?

Also, i agree with your ideas, it's alot more complicated to trade the news manually based off of diplomatic previews, but it's worth all the hardwork. Once you get used to it, the hardwork i mean.

I'd love to see more insight and forecasts from you, i think that you may be onto something. And that something is more than likely good.
  • #69
  • Sep 15, 2006 2:02pm Sep 15, 2006 2:02pm
Hey Folks,

Interesting thread. Promoting research and study is obviously a good thing. My only fear would be the forecasted numbers. Someone did mention the USA Trade Balance. The article off a Bloomberg stated that it would likely be a higher negative, and that was true. Though the number was forecasted to be a higher negative. Even if the number came out worse and could still be the third highest trade deficit ever... if it were just slightly better than forecast the USD would have spiked heavily against the other currencies.

Now I know exactly what you are saying in the thread. Educate yourself and maximize profit and cut down on losses. Just playing Devils Advocate a bit. Good thread I will apply some more research for sure.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #70
  • Sep 15, 2006 2:34pm Sep 15, 2006 2:34pm
Interesting thread. I am mainly responding so I can subscribe to the thread. I used to like to listen to the news and respond, which can still be a viable strategy with very large deviations from the expectations. However, the widening of spreads at release time makes getting a desirable position almost impossible on most news reports during the first post release spike. What used to be a 10-15 pip profit with Oanda can very easily be a 25 pip loser now. I figure all brokers will adapt to news scalping as Oanda did, so I did not bother to change brokers.

Trying to adapt and develop a strategy that can be successful for many years. Thanks for the interesting information.
happy trading
  • #71
  • Sep 15, 2006 3:30pm Sep 15, 2006 3:30pm
My question is, how do you min losses if you are predicting the affects of news? Considerig you have a 50-100 stop loss, then if you enter a losing trade, you will most likely stay with the trade unless you bail out fast, but IF the pair keeps on dipping on the bad prediction, then wont emotions come to play in this trade? Emotions are the worst enemy of traders. Predicting can be summed up as gambling. But i will give this a try. Thanx for the info on what to read pre-news release, these are valuable info when it comes to news trading. To be more thourough, one should study PAST news reports AND past articals that predicts the news. That way one can understand if these "Guru" were right when it came to news announcments. Research is the name of the game for news trading. 80% seems VERY impossible to make, but 55-60 with the right money management is VERY plausable!

How i would do it is have a 10-30 stop loss before entering a trade, i would exit manually of course AND have a money management system, rather than gamble all of my money away on one bad trade, esp if the leverage is 100:1, that can KILL ANY BANK ROLL!!
  • #72
  • Sep 15, 2006 4:52pm Sep 15, 2006 4:52pm
Quoting hunter101
My question is, how do you min losses if you are predicting the affects of news? Considerig you have a 50-100 stop loss, then if you enter a losing trade, you will most likely stay with the trade unless you bail out fast, but IF the pair keeps on dipping on the bad prediction, then wont emotions come to play in this trade? Emotions are the worst enemy of traders. Predicting can be summed up as gambling. But i will give this a try. Thanx for the info on what to read pre-news release, these are valuable info when it comes to news trading. To be more thourough, one should study PAST news reports AND past articals that predicts the news. That way one can understand if these "Guru" were right when it came to news announcments. Research is the name of the game for news trading. 80% seems VERY impossible to make, but 55-60 with the right money management is VERY plausable!

How i would do it is have a 10-30 stop loss before entering a trade, i would exit manually of course AND have a money management system, rather than gamble all of my money away on one bad trade, esp if the leverage is 100:1, that can KILL ANY BANK ROLL!!
You bring a few good points up. Let me clarify my position:

 

  1. Leverage is 400:1

  1. 50-100 pip stop loss is not to prevent loss when it goes the wrong way but so the trade continues until it reverses. You manually get out of your trade as close to the point you entered so your loss is minimal. (Do it only if you can risk it. This is money management. On a mini-lot, it is about $100 per lot. On a standard lot, it is about $1,000 per lot.)

  1. 80% is possible and accurate. The signal services that claim 80% accuracy are no different.

  1. My title is Predicting direction of economic releases because it is eye-catching and got wide readership. If you are using the news to determine direction of a release, you are not predicting. Your decision is based on research by news analysts. In actuality, you are employing well-educated people to do the work with the benefit of not having to pay them a salary.

My point is: Get an education, hire someone to do it for you, or do it yourself.

  • #73
  • Sep 15, 2006 5:02pm Sep 15, 2006 5:02pm
Quoting Klaka
There is just one another way to trade the news, 99%, it's almost foolproof.

Insider Information.

Anyone got any grandparents, or uncles in the FED, or in the SquakBox information processing centers?!

(Humor)

NGDaniel has a point, it will all eventually become intuitional anyways, so why pay, or straddle when you can get in before the spike and be right 80% of the time, based off your own skills?

Also, i agree with your ideas, it's alot more complicated to trade the news manually based off of diplomatic previews, but it's worth all the hardwork. Once you get used to it, the hardwork i mean.

I'd love to see more insight and forecasts from you, i think that you may be onto something. And that something is more than likely good.
We all have employees with this inside information. They report the news. This is the reason why business news people are forbidden to trade. The SEC has strict rules on insider trading. News reporters are required to sign nondisclosure agreements as part of employment.

Now, I've received several personal messages suggesting that I have an early newswire service. I do not. I subscribe to no services. I use the same services that everyone has access to. The article I posted on the recent US CPI affecting the US dollar came from the google.com news search service. The only competitive advantage I have is I do my own research and continue to encourage others to do the same.
  • #74
  • Sep 15, 2006 6:19pm Sep 15, 2006 6:19pm
Quoting ngdaniel
This is money management. On a mini-lot, it is about $100 per lot. On a standard lot, it is about $1,000 per lot
I think you have added an extra zero onto these. In no transaction interbank or otherwise would 1 std lot be equiv of $10m where the term ccy is usd
  • #75
  • Sep 15, 2006 7:43pm Sep 15, 2006 7:43pm
I appreciate this is a general chat forum, but I also view it as an a place of learning, where the FF community strives to develop and share its understanding of trading and the markets, for the betterment of all.

Because of this, I am making comment on the quotes below by ngdaniel, which I believe could mislead new investors in to thinking this endeavour is easier than it really is (ngdaniel, I am not questioning motive - the quotes may simply have been written in haste).... Just to add some clarity really:

Quote
Speculating on the JPY is difficult because the Japanese government provides pre-release reports that slows down volatility. The US, UK, and EUR markets do the same thing but no through government. We have the business media but we don't use it properly. The business media is always trying to gain market share over the competition. They are the best source to let us know what is going on.

In the past, the Japanese authorities have been viewed by some outsiders as having greater favour with locals with pre-release data, but I can't comment on the degree to which this still goes on. Either way, I understand it was the trading institutions that were receiving the information directly and not the press (otherwise, just imagine the scandal). Also, the idea of pre-release reports is definitely not the case in the US or UK or Euroarea. Okay, so some German data doesn't come out exactly when it is supposed to and leaks have been known (again, not to the general press, but on the FX grapevine). And I'll grant that the price action just prior to the release time can suggest insider trading (I've witnessed this on many an occassion, a minute or so before the release time). But, at the end of the day, when it comes to the important data - the press hasn't got anymore of a clue than anyone else. I would say thay are far from the best source to let us know what is going on.

The general financial media can be an important source of information, but in terms of divining the outcome of an economic release, they are of little use. As with price action, for the most part economic data follows a random walk relative to consensus expectations.

I would say the financial media offer third tier information at best. Broker reports from analysts and economists you could call second tier, and then there is the raw data and your mind, which is the first tier. In terms of effort of analysis, I wouldn't focus on the media simply because it is right there in front of your eyes and because there is lots of it. It's close to the equivalent of junk mail. They are just story spinners, churning out their daily piece with no real 'ownership' of the outcome. I'm not saying there is no value at all in what they say, just that it requires a great deal of objectivity and that it can only provide you with limited information at best. With respect to the tv channels of Bloomberg, CNBC, I think viewing their content as mostly 'entertaining noise' is the healthiest approach - most professional trading rooms have these stations running in the background with the volume turned off! The market only really listens to the tv when something really important is happening. Unless you have the Bloomberg and Reuters terminals, you just don't get very much objective data and information for the time you are investing - there are other benefits re gaging mkt sentiment and getting and developing trading ideas but we are talking purely about predicting economic data releases here.

When it comes to broker reports, there is much more factual information to absorb which can be of use, but at the end of the day, these too are just sales tools for the banks.

I fully agree with the concept about thinking for yourself, but it's important to do this with as much of a complete awareness as is possible of the system we are operating in, with an appreciation of the value of endless stream of information we are being bombarded with.

Quote
The first spike is the expectations spike and not the news report. After the first spike, anything can happen.
I don't understand this. Surely, all the price action after the data release simply reflects the price absorbing the news report relative to the consensus. Of course, the nature of the economic news beast is that so much information can be released in a single report that the mkt has to 'digest' the implications, and the price could and often does change direction, but that is the nature of a market. The first spike, second spike, and all the price action thereafter is surely just a part of this single continuous process.

Quote
My order is placed before high volatility so the stop loss order has to be honored.
This is simply not true. If a price gaps, a price gaps. If you are dealing with an honest broker (okay, that's questionable!) they would stop you out at the same point where news straddle traders would get filled. There is honour and then their is bending over backwards and if there is no price, there is no price. Of course, if you are right 80% of the time of course, the strategy will be effective where a straddle would fail - but I am just talking about honouring stops here.

Myself, I trade the economic data in the context of a medium term perspective so the risk of gaps is reduced.

Quote
80% is possible and accurate.
Traders could become a very wealthy with just 55% accuracy. If these 80% type results can be achieved consistently I will be amazed. I'm not saying 80% is totally impossible, but that it might just a string of lucky predictions (ie the real 'expected value' may be a lot closer to 50%). Think about it - you have economists and strategists bringing home between $100k and $500k (ball park) a year, whose jobs it is to estimate this stuff as closely as possible. If the 'experts' are no better than random, what makes us think we achieve 80% with only 10% of the information (or even less). And as much as I respect economic data analysis by the pro's, if their stuff had any intrinsic value, these reports wouldn't be pedalled out to their clients for the sole purpose of generating sales/trades. The analysis would be kept in-house for sole use by the prop-desks.

Quote
If you are using the news to determine direction of a release, you are not predicting. Your decision is based on research by news analysts. In actuality, you are employing well-educated people to do the work with the benefit of not having to pay them a salary.
See above. Also, surely it's still predicting, it's just more informed.

To end, I believe using the general financial media to predict a given data release and then to trade the data over such a short period of time is very close to straddle trading - it could even be perceived as being more risky because if your prediction is way off then you may get gapped in a big way (a 50 pip jump could easily happen), whereas with a straddle, you may get gapped 50 pips, but you would be simply be entering a new trade at this point and not sitting on a 50 pip loss off the bat. Of couse, if your prediction is right, its all in your favour, and you can simply change your trade size to reflect these risks.

This is in no way a personal attack. Your approach is a great way to learn about the markets and I hope your method succeeds. I just wanted to clarify a few points to help newbies who may have been led astray by some of the possible false hope on this thread.
"Always bet on black"
  • #76
  • Sep 15, 2006 11:15pm Sep 15, 2006 11:15pm
Quoting sccz97
I think you have added an extra zero onto these. In no transaction interbank or otherwise would 1 std lot be equiv of $10m where the term ccy is usd
Yeah, I guess I did and didn't realize it. Thanks for making the correction.
  • #77
  • Sep 16, 2006 11:38am Sep 16, 2006 11:38am
daniel, i have been out of this thread for a bit...

have you made any predictions so far? what is your record for calls live on FF?
Relax and be happy.
  • #78
  • Sep 16, 2006 8:16pm Sep 16, 2006 8:16pm
Quoting merlin
daniel, i have been out of this thread for a bit...

have you made any predictions so far? what is your record for calls live on FF?
Been posting messages so others can see what I've been looking at and following.

I just follow the news because it is like having employees that you never have to pay. All these news analysts do all the work and report it early. My "predictions" or market direction is based on the news. How right they have been is how right I have been.

Ask around or read the postings. The core CPI was correct and I showed the news article from the day before.
  • #79
  • Sep 17, 2006 6:19am Sep 17, 2006 6:19am
Quoting ngdaniel

The problem with trading after the news release is that many brokers will not guarantee orders during high volatility. I've read others complain of increased pip spreads, hedging with 2 accounts, etc. Personally, I think it is a load of crap. Straddle trading may still work but I prefer to do things my way.

Try trading the news on your demo account for a month or two before actually trading on your real account. Pre-release news is always available. For example, some entity has moved ahead of the release of some report due out. I feel that an entity that moves ahead of a news release has to know something ahead of everyone else - inside information? Perhaps.

Let me know your experiences.
I've only experienced online connectivity issues with high vol. environments, and its been infrequent at best. I think that this would be expected in retail environments.

Although trading demo is always a sure way to test things real-time, until your riskng real money, I never learned anything about money mangement and I blew up my account. Its only until your trading real money that you learn, and learn fast, that you start to get better.

Like you, I trade news releases, and I find that this works better than adhering to strict tech. analysis. I developed a priority system:
1. New Release
2. Money Management
3. Trend
4. Fib Retractments.
Profitsee - Knowing the future is not enough.
  • #80
  • Sep 17, 2006 6:32am Sep 17, 2006 6:32am
Quoting ngdaniel
. Make the trade. Don't get emotional about it. If it goes against you, get out. If it is in your favor, stay in the trade until the movement stops and hangs or decide to get out if it backs up by 5 pips.
OH, yeah, that's pretty funny. I made a trade once in the correct direction of the GBP/USD, but I set a real tight stop-loss. My stop was hit in 1 hour, and then it reversed, and then for the next 10 days the GBP soared in my direction. I was pretty burned by the fact I missed the trend AND I lost money by the stop.

So could you refine your observation about when to "get out"? Would that be time or pip dependent? You see, I don't think you can make a statement like that without accounting for the how much willing you're prepared to drawdown before getting out. You bring up an emotional point
Profitsee - Knowing the future is not enough.
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