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  • #15,261
  • Oct 21, 2017 1:55pm Oct 21, 2017 1:55pm
Quoting billbss
{quote} Hi Tony, Help me out on this. Which pair did u trade and why? Where did u take profit and why? Thank you.

Hi Bill, USD/CAD traded because CAD Cpi was coming out. Took profit at 120 pips as planned in 1st post.

Thanks
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  • #15,262
  • Oct 21, 2017 1:55pm Oct 21, 2017 1:55pm
Quoting Joseph95
{quote} Tony, if you could update the first post with all Your knowledge about this trading approach accumulated in 10 years, i' ll be very glad and i'm sure other members too. Actually you can see there are a lot of questions about this strategy: Sign that the first post is "incomplete" or poor of infomations for trade it just "armed" with the image in the first post. If you could update it with something Like FAQ or just what you learned it would be great

ok took note
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  • #15,263
  • Oct 21, 2017 1:55pm Oct 21, 2017 1:55pm
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  • #15,264
  • Oct 22, 2017 9:36pm Oct 22, 2017 9:36pm
Hi Tony and others,

I have been lurking around this thread on and off for many years. I always felt your news trading method to be simple and transparent. For a number of years now I have only traded NFP news (with fairly good success) after the news release. I use it as an-add on to my main trading. However I am interested in extending this to other news events and have decided to try your method.

I traded the Friday CAD news release with a small trade (2 lot) and made a nice 60 pips on it (real account). My broker slipped me 20 pips on the positive side.

This got me to thinking about the strategy approach.

Some discussion on the approach as follows:

1/ Trading against expectation –

As I was slipped on the positive side it is likely I will get slipped against me if I call it the wrong way. I notice in the thread many people post about the slippage issue (as it is often a ‘broker related’ platform issue or liquidity issue - with some brokers much better than others). However this can work for us since bulltrader13’s idea of trading in the direction against the expected outcome means that there is possibly a higher chance of positive slippage (as happened for me).

For example Fridays CAD Core Retail Sales came out as -0.7% v 0.3% forecast – and the previous month at 0.2%. Hence the expected was for an increase but it went against this considerably. Had it come out as, say, 0.2% (same as previous- but down on expectation) or 0.4% (better than previous and up on expectation) then I believe the better brokers would not slip you as much had you decided to short the USD/CAD since the movement would not have caught the market by such a surprise. And significantly in this example the news result is no worse than the previous months result - so less shock value.

Thus I believe bulltrader13 has a good idea here. Not only will he possibly gain a much bigger move on average if it goes his way – but there may be a better chance of net positive slippage over a number of trades. So it may be worth keeping trades in line with the best ‘shock’ value. (It will be interesting to see what my negative slippage comes out at when I get a trade on the wrong side)

However this approach may be offset by a lower win rate than 50% since over all news forecasts tend to be in line with the general increase or decrease in the result relative to the previous month. And if we were to go against this all the time then it may lower the win rate - but improve the risk reward opportunity (This needs to be assessed to prove or disprove)

TO be continued....
  • #15,265
  • Oct 22, 2017 9:40pm Oct 22, 2017 9:40pm
2/ Trading with the primary trend –

I believe that trades in line with the (mid to long term) primary trend have a chance to go much further. Also in my opinion the news releases are more often in line with the primary trend – since it is this positive (or negative) economic (news) environment that helps create the primary trend in the first place.

Also there is something to be said about the ‘smart money’ that creates the market direction for any given instrument. Line up with the smart money and maybe there is a greater than 50% chance for a win rate.


3/ Risk Reward –

So what is the logic to a 1:6 risk reward (18 pips stop, 120 pips target) as has been stated. This seems to be something of a fire and forget approach – and perfectly understandable as a strategy if the win rate is much less than 50% (and I assume with whip saws etc that this may well be the case). And if you have the trade going with the primary trend for the pair then this is quite a realistic target – but what about the trade that works out but is against this trend or what if other news that could impact this pair is to be released in the near future, or what of major support or resistance areas…

I would ask what others (and you Tony) are doing to manage their exits and whether it is worth making targets relative to primary trend and also ATR…??

4/ Pre-entry Price Action –

It was interesting to observe the pre-entry PA movement prior to the CAD news release. The price moved down ~15 pips over the final minute. (As I trade an MT4 platform I can only trade down to the minute.)

I entered this trade at the open of the minute prior to news release as I was not sure of the spread widening for this news event. And I did not look at it unfortunately whilst waiting for the news release (I will observe this going forward). However I know that the price came within 3 pips of the SL so the bid side of my spread was no greater than this.

Had I gone short on this trade then initially I would have been up some 15 pips less the spread just prior to the news release. If I assume the spread on this trade widened to around 4 pips (split across the bid and ask rate) then I would be up ~11 pips – prior to getting stopped when news release occurred.

This counter trade movement can often be seen as the market seeks out the weaker stops prior to going the opposite direction.

So two outcomes can occur (a) you go in the right direction and sustain a draw down (but hopefully not to your SL) and then the trades goes in your direction – and you profit, or (b) you go into profit as the market pulls back before going against you, and (c) of course you may have little or no draw down or go into no profit on the trade prior to the release – this is fine and will have no chance of effecting the trade prior to the event.

So there is a chance to do something with the situations in (b) above – which happens quite regularly. I am wondering if it would be worth an EA or script to trail the stop (but retain the 18 pip gap from price action – and to take into account the spread widening at the same time (of course this can jump around a bit but most good brokers don’t let it become too crazy).

This would mean that should you be in a trade in the wrong direction and the market goes searching for weak stops you could significantly limit your risk on the loss. With the CAD trade, had I gone short, I may have been able to have the SL move to only a 7 pips risk (as it would have been up 11 pips net of spread) - but still retain the 18 pips gap.

This could have a significant impact on your R:R over time – especially, if, for example, half of your losing trades go into short term profit before killing off your trade …. think about it.

Comments and discussion appreciated.

Tim
  • #15,266
  • Edited 10:39pm Oct 22, 2017 10:29pm | Edited 10:39pm
Quoting timmy
2/ Trading with the primary trend – I believe that trades in line with the (mid to long term) primary trend have a chance to go much further. Also in my opinion the news releases are more often in line with the primary trend – since it is this positive (or negative) economic (news) environment that helps create the primary trend in the first place. Also there is something to be said about the ‘smart money’ that creates the market direction for any given instrument. Line up with the smart money and maybe there is a greater than 50% chance for a win...

Tim I see you have a lot of experience but there is no need to reinvent the wheel. Look I traded CAD CPI on Friday. I had 1 trade with CAD/JPY and 1 trade with USD/CAD. My CAD/JPY trade failed with a 18 pip SL. No slippage with Oanda. The other one USD/CAD took off like a rocket. Sign-up with Oanda and become rich. Other brokers used to slip me for 50 to 80 pips. I have thrown them in the garbage, deep.

I also read the part about EA trailing stops and calculating spread widening before the news. Here is a better solution: place the trade at HH:MM:58
e.g. News coming out at 8:30:00. Place the trade at 8:29:58. I'm telling you man, I'm nailing it here for a long time now. I'm living like the Kardashians.
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  • #15,267
  • Oct 22, 2017 11:01pm Oct 22, 2017 11:01pm
Quoting Tony112
{quote} Tim I see you have a lot of experience but there is no need to reinvent the wheel. Look I traded CAD CPI on Friday. I had 1 trade with CAD/JPY and 1 trade with USD/CAD. My CAD/JPY trade failed with a 18 pip SL. No slippage with Oanda. The other one USD/CAD took off like a rocket. Sign-up with Oanda and become rich. Other brokers used to slip me for 50 to 80 pips. I have thrown them in the garbage, deep. I also read the part about EA trailing stops and calculating spread widening before the news. Here is a better solution: place the trade...
Hi Tony, Great thread! I'm new here and I already love your strategy. I have only recently started reading the thread on my days off of work so I'm not too far along yet although I have started copying and pasting notes of yours. One question I have so far is.......do you only place a trade in one direction or do you place in both directions and cancel the trade that moves in the wrong direction? It appears to me that you only trade in one direction and if you are correct then great but if you are wrong than you only lose 16 pips. Thanks for all your work Tony!
  • #15,268
  • Oct 22, 2017 11:27pm Oct 22, 2017 11:27pm
Quoting bojack34
{quote} Hi Tony, Great thread! I'm new here and I already love your strategy. I have only recently started reading the thread on my days off of work so I'm not too far along yet although I have started copying and pasting notes of yours. One question I have so far is.......do you only place a trade in one direction or do you place in both directions and cancel the trade that moves in the wrong direction? It appears to me that you only trade in one direction and if you are correct then great but if you are wrong than you only lose 16 pips. Thanks...

Hi bojack, the best option for a beginner is to place only 1 trade a few seconds before news with a 18 pip stop-loss.

You might try to hedge your luck with 2nd trades and so on but here are the disadvantages:
-with 2 trades you will use only half of your potential on each trade (half of account margin) e.g. instead of buying 100,000$ each trade will be 50k$
-it will get confusing if you have to reconfigure a stop-loss before the news comes out and you may get mixed up. Don't use programs to trade for you. It's not a good idea in any case.

Good luck man!
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  • #15,269
  • Oct 23, 2017 7:39am Oct 23, 2017 7:39am
Quoting Tony112
{quote} ok took note
Thank's very much. You'r experience it's fundamental to succeed with this trading approach! :-)

Cheers
  • #15,270
  • Oct 23, 2017 7:41am Oct 23, 2017 7:41am
Do you know why this thread has over 700 posts and only the OP is the one still posting in it? Because this trading strategy is completely flawed and you have better odds in a casino.
  • #15,271
  • Oct 23, 2017 7:43am Oct 23, 2017 7:43am
Quoting catchmeifyou
Do you know why this thread has over 700 posts and only the OP is the one still posting in it? Because this trading strategy is completely flawed and you have better odds in a casino.
Tell us how it is flawed.
  • #15,272
  • Oct 23, 2017 7:54am Oct 23, 2017 7:54am
Quoting catchmeifyou
Do you know why this thread has over 700 posts and only the OP is the one still posting in it? Because this trading strategy is completely flawed and you have better odds in a casino.
I can't see the sense about posting here for 10 years trading with a flawed strategy.
  • #15,273
  • Oct 23, 2017 11:25am Oct 23, 2017 11:25am
Quoting Tony112
{quote} Hi bojack, the best option for a beginner is to place only 1 trade a few seconds before news with a 18 pip stop-loss. You might try to hedge your luck with 2nd trades and so on but here are the disadvantages: -with 2 trades you will use only half of your potential on each trade (half of account margin) e.g. instead of buying 100,000$ each trade will be 50k$ -it will get confusing if you have to reconfigure a stop-loss before the news comes out and you may get mixed up. Don't use programs to trade for you. It's not a good idea in any case....
Thanks for all your help Tony. I will do what you say. I will only trade one direction. I'm pretty sure that you don't have a strategy on here that explains wh you select the direction you do. If I'm not mistaking you just pick a direction and go with it. If I am incorrect please feel free to explain. I also am wondering if ALL of the black new events on your calender are always the same. For example will all CAD Employment ALWAYS be black news? Or will ALL Employment News for ALL currencies always be black? I'm trying to come up with a list of High Impact News event's that I can ALWAYS trade regardless of currency. Thanks Tony!
  • #15,274
  • Oct 23, 2017 12:29pm Oct 23, 2017 12:29pm
What about currency futures brokerages?
  • #15,275
  • Oct 23, 2017 7:29pm Oct 23, 2017 7:29pm
Quoting catchmeifyou
Do you know why this thread has over 700 posts and only the OP is the one still posting in it? Because this trading strategy is completely flawed and you have better odds in a casino.

Ok, I will catch you with this:

1st: this thread doesn't have 700 posts, this post right here is the 15,275th post!!!! do you know how to count? go back to school
2nd: if you have better odds in the casino, what are you doing here?? go to the casino!
3rd: beside your name it says you have 9 posts when I hold my mouse, are you a newbie or a kid, or both? are you a guru or a financial vet??
4th: are you a hater?
5th: how can someone go on for 10 years strong and the thing doesn't work?
6th: how can you affirm that it doesn't work, what proof do you have during your 2 minutes testing? Have you tried for years? Show me the the mathematical proof or back-test that proves it doesn't work.
7th: it's not only me posting, we have hundreds of subscribers and millions of visitors out here. The thread is in the top 10 most visited threads on FF with over 5 million views. You will get your face stepped on by other members if you try to insult me.

Let me see what you have to say, lil' newbie
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  • #15,276
  • Oct 24, 2017 7:06am Oct 24, 2017 7:06am
Quoting Tony112
{quote} Ok, I will catch you with this: 1st: this thread doesn't have 700 posts, this post right here is the 15,275th post!!!! do you know how to count? go back to school 2nd: if you have better odds in the casino, what are you doing here?? go to the casino! 3rd: beside your name it says you have 9 posts when I hold my mouse, are you a newbie or a kid, or both? are you a guru or a financial vet?? 4th: are you a hater? 5th: how can someone go on for 10 years strong and the thing doesn't work? 6th: how can you affirm that it doesn't work, what proof...
You are trying to trade news, brokers will slip you and cost you dearly. 10 years and I wonder.. are you even profitable yet? Most probably not. If this method was successful you would have a whole group of traders posting daily exclaiming the success, but that is not the case. The thread has periods of months with no replies. You have an ego boost from posting on here, thats probably the only reason you still do it, and it probably brainwashes yourself more into thinking the method works.
  • #15,277
  • Oct 24, 2017 7:51am Oct 24, 2017 7:51am
Quoting catchmeifyou
{quote} You are trying to trade news, brokers will slip you and cost you dearly. 10 years and I wonder.. are you even profitable yet? Most probably not. If this method was successful you would have a whole group of traders posting daily exclaiming the success, but that is not the case. The thread has periods of months with no replies. You have an ego boost from posting on here, thats probably the only reason you still do it, and it probably brainwashes yourself more into thinking the method works.
There isn't a whole group because
1) There are a lot of people who "study" this for 2-3 days and then leave because "doesn't work"
2) For work good with this i think you must use Oanda, because the 5-sec charts , slippage, tp and sl respected etc. Maybe not all are available to exit from their comfort zone trying something totally new on another broker.
3) They don't have the patience for wait good news. So they goes on searching for another holy grail.
  • #15,278
  • Oct 24, 2017 8:25am Oct 24, 2017 8:25am
Well not getting up for AUDs news tonight but would of played a short on the news. Tomorrows going to be tricky as expected is same as previous so no direction for me.. might just play the opposite of the XX:25 5 minute candle.
  • #15,279
  • Oct 24, 2017 8:26am Oct 24, 2017 8:26am
Quoting bulltrader13
Well not getting up for AUDs news tonight but would of played a short on the news. Tomorrows going to be tricky as expected is same as previous so no direction for me.. might just play the opposite of the XX:25 5 minute candle.

I'm gonna risk 18 on it.
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  • #15,280
  • Oct 24, 2017 8:28am Oct 24, 2017 8:28am
Quoting catchmeifyou
{quote} You are trying to trade news, brokers will slip you and cost you dearly. 10 years and I wonder.. are you even profitable yet? Most probably not. If this method was successful you would have a whole group of traders posting daily exclaiming the success, but that is not the case. The thread has periods of months with no replies. You have an ego boost from posting on here, thats probably the only reason you still do it, and it probably brainwashes yourself more into thinking the method works.

I feel sorry that you will get ignored on your 10th post. Good luck rookie.
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