News Breakout Strategies: who's got one? | Forex Factory

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News Breakout Strategies: who's got one?

  • #1
  • First Post: Jan 25, 2010 2:54am Jan 25, 2010 2:54am
Well I haven't. Sorry if you opened this thread hoping to look at mine. But I haven't seen many news breakout strategies outlined in the trading systems forum. Plenty of market open breakout strategies, but nothing that really covers news events and the volatility that sometimes accompanies them.

So if you actively trade the news, how about sharing your ideas here? Or if there is a thread devoted to the topic already, perhaps you could direct me to it. Anyway, I know news is a dangerous game, but I'm here to learn, not to gamble.
  • #2
  • Jan 25, 2010 3:19am Jan 25, 2010 3:19am
I do microscalping, enter on visible momentum off M1/S10 charts, with acceptable winners as low as 2-3 pips. I regularly trade after news events with success. Entries are made after the announcement, after the spreads come back to normal or close to it. Not much of a strategy per se, just an exploitation of volatility that is key to microscalping generally. I trade E/U almost exclusively.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #3
  • Jan 25, 2010 5:16am Jan 25, 2010 5:16am
Some of my most "solid" and profitable trades are from news trades.
Here what i'll usually trade CPI, Interest rate, GDP, non-farm, unemployment, retail data from US, GB, AUS, NZ, CAN.

The key to news trading is pre-planning and patience.

Here what i usually do
1) only trade on high impact news (listed above)

2) select the corresponding pair which the news will impact on

3) Look at the forecast and plan out buy/sell positions. You'll want the actual release to have a good deviation from the forecast i.e forecast for non-farm -11K, you'll want to Buy USD if it has a large deviation such as +50K or Sell USD if -70K. Otherwise if the news is the same as forecast, stay out!

4)When the news is released and say the results are good and the price goes up (in the correct direction) WAIT for the retracment. I usually apply fib levels on the 1-2minute candle from pre-news to post-news spike and try to enter at 66%or50% retractment.

5) Also take note of any previous revisions.

You are basically looking for a "surprise result" which stacks the odds in your favour, and then entering on the retracment.

"surprise results" occur more often then you think (averaging 5 times a month) each time there is a really high probablity of netting 50-100pips within hours
  • #4
  • Jan 26, 2010 4:46am Jan 26, 2010 4:46am
Here is an example of a news trade i did tonight for the GBP/USD based on UK GDP

I took a note of the pre-release level which was hold at around 1.6200
Waited for the news to be released and only traded if there was a distinct deviation from the forcast.

Forcast was at 0.3%, ideally i would have entered a larger short position if the news was <0% or long if the release was >0.7%. But since it was only 0.1% i shorted a smaller position.

Waited about 40 seconds from the release and looked for the retracment on the 1M candle before entering a short. So far 40+pips within 1hr of news release. Exit for me will usually be at the next major support @ 1.6100
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  • #5
  • Jan 28, 2010 4:56am Jan 28, 2010 4:56am
Good stuff. Thanks for sharing Bob.

P.S. I like your name heh heh
  • #6
  • Edited 5:30am Jan 28, 2010 5:10am | Edited 5:30am
What if you knew the results of the "news" announcement before it came out - do you think that would be a significant advantage?

The German unemployment figure was correctly called on the OandA newsfeed this morning - 4 minutes before the announcement. Not the first time I have seen that happen.

I have noticed on sterling-related news quite a few times in the recent past that there have been significant moves on the pair (cable, typically) well before the related announcement - right up to the announcement - continuing in the same direction afterwards....

Are certain news announcenments more prone than others to leaks? The whole issue of manipulation and its association with the "news" may or may not relate to realizable strategies for trading the "news" - but I'd be interested in hearing any other views..
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7
  • Jan 28, 2010 5:35am Jan 28, 2010 5:35am
Quoting The Fool
What if you knew the results of the "news" announcement before it came out - do you think that would be a significant advantage?

The German unemployment figure was correctly called on the OandA newsfeed this morning - 4 minutes before the announcement. Not the first time I have seen that happen.

I have noticed on sterling-related news quite a few times in the recent past that there have been significant moves on the pair (cable, typically) well before the related announcement - right up to the announcement - continuing in the same direction...
Even if you know the news in advance, you don't know how the market will react to the news. Often the reaction is the reverse of expectation because the market has already factored the result in. Like "buy the rumour, but sell the fact"
  • #8
  • Jan 28, 2010 5:42am Jan 28, 2010 5:42am
I monitor the following:

Only trade NFP, Interest rate decisions, Home sales, Retail sales, CPI and a couple of other high impact events.

Wait for 15 minutes after announcement, enter a trade 2 pips above/below the 15 min candle and trail with a 20 SL.

No I didn't think of this strategy but I've seen it in various forums etc.
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  • #9
  • Jan 29, 2010 1:40am Jan 29, 2010 1:40am
Quoting forexmick
Even if you know the news in advance, you don't know how the market will react to the news. Often the reaction is the reverse of expectation because the market has already factored the result in. Like "buy the rumour, but sell the fact"
You really need to compare the news to the forecast and really have the self control to stay out if the news is only slightly different, even if you have spent hours before hand planning the trade.

I usually trade only if the deviation was double or more then what is predicted.
i.e if forcast interest rise was +0.25%, i will only trade if it was +0.5% or 0%
if forecast unemployment change was 40K, only trade if it was >+80K or <0K etc etc

If the price initially reacts in the opposite direction and you traded accordingly on the "double or more rule", 95% of the time you will just end up profitting more from the stupidity of the market from speculating before news. - A classic example of this was on the non-farm on DEC the 4th. Where expectations were BAD for the US but instead the news was more then EXCELLENT.. dispite this the initial move was the opposite direction for a few minute - probably trigger happy seller of USD, but eventaully it moved in the correct direction. Plenty of time to get in
  • #10
  • Jan 29, 2010 8:06am Jan 29, 2010 8:06am
Just made a nice 28... could have left it to make more but I was happy

I trade the big news... wait a couple of minutes after the release wait for the retrace and see how it feels.

Oz
  • #11
  • May 13, 2018 4:06am May 13, 2018 4:06am
Sorry to restart an an old thread, however wondering whether Bobbybob is still around and if he’s still using this strategy???
i really like the look of it and plan to start implementing this.

Quoting BobbyBob
Some of my most "solid" and profitable trades are from news trades. Here what i'll usually trade CPI, Interest rate, GDP, non-farm, unemployment, retail data from US, GB, AUS, NZ, CAN. The key to news trading is pre-planning and patience. Here what i usually do 1) only trade on high impact news (listed above) 2) select the corresponding pair which the news will impact on 3) Look at the forecast and plan out buy/sell positions. You'll want the actual release to have a good deviation from the forecast i.e forecast for non-farm -11K, you'll want to...
  • #12
  • May 16, 2018 12:46pm May 16, 2018 12:46pm
Quoting Gabwilliams
Sorry to restart an an old thread, however wondering whether Bobbybob is still around and if he’s still using this strategy??? i really like the look of it and plan to start implementing this. {quote}
Yeah this was a great read, got loads from it.

Been searching for help like this, it would be great to get the thread number up
  • #13
  • May 16, 2018 5:51pm May 16, 2018 5:51pm
Quoting The Fool
I do microscalping, enter on visible momentum off M1/S10 charts, with acceptable winners as low as 2-3 pips. I regularly trade after news events with success. Entries are made after the announcement, after the spreads come back to normal or close to it. Not much of a strategy per se, just an exploitation of volatility that is key to microscalping generally. I trade E/U almost exclusively.
LOL...my how the years go by....I don't "microscalp" or even trade forex anymore, but I still trade around events - trading individual stocks around their earnings releases, country etf's around important election dates, the most liquid US equity etf's around big scheduled news announcements (FOMC etc)....

It's easier to "trade the news" using options, I have found, and the various techniques for doing so are not secret and are indeed written/talked about all over the net...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #14
  • Sep 9, 2023 7:41pm Sep 9, 2023 7:41pm
Quoting The Fool
I do microscalping,
....boy those were the days....watching 10s pa almost fried my brain banana...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #15
  • Sep 10, 2023 12:18am Sep 10, 2023 12:18am
Quoting The Fool
{quote}....boy those were the days....watching 10s pa almost fried my brain banana...
how do you trade nowadays ? Curious to know you have tons of experience i’m eager to learn from
SKQT - Super Kool Quant Trader
Daily Remy All Time Return: 5.6%
  • #16
  • Sep 10, 2023 12:43am Sep 10, 2023 12:43am
Quoting bobsmith
Well I haven't. Sorry if you opened this thread hoping to look at mine. But I haven't seen many news breakout strategies outlined in the trading systems forum. Plenty of market open breakout strategies, but nothing that really covers news events and the volatility that sometimes accompanies them. So if you actively trade the news, how about sharing your ideas here? Or if there is a thread devoted to the topic already, perhaps you could direct me to it. Anyway, I know news is a dangerous game, but I'm here to learn, not to gamble.
To talk about my trading practice, I try to analyze the market technically and don’t trade if it’s not a high impact news. I try to browse social media sites to see how others are measuring the upcoming newsmovement and always tie my trades with a tighter stop loss.
  • #17
  • Sep 10, 2023 11:02am Sep 10, 2023 11:02am
Quoting Erpthetrader
{quote} how do you trade nowadays ? Curious to know you have tons of experience i’m eager to learn from
I mostly trade index options. Still trade around major news events.

https://www.forexfactory.com/thread/...4#post14569894
"If The Fool persists in his Folly he will become wise." - William Blake
  • #18
  • Edited 12:00pm Sep 10, 2023 11:10am | Edited 12:00pm
HEY GUYS! Truth is, I'm currently incarcerated and I'm reading a for dummies book on currency trading. Could someone be my mentor/pen pal? I have 10 months left and I'm serious about trading forex. I have john Murphy's tech analysis book and candlestick book. I don't have much in here but if you're interested, please reach me at { personal information deleted by staff, per request }
  • #19
  • Sep 10, 2023 5:38pm Sep 10, 2023 5:38pm
Quoting Gallomoney94
HEY GUYS! Truth is, I'm currently incarcerated and I'm reading a for dummies book on currency trading. Could someone be my mentor/pen pal? I have 10 months left and I'm serious about trading forex. I have john Murphy's tech analysis book and candlestick book. I don't have much in here but if you're interested, please reach me at { personal information deleted by staff, per request }
I’m still a student of the game… But I can teach you what I know… I have about 4 years of experience. I can tell you what not to do and lead you in the right direction PM if your really interested
SKQT - Super Kool Quant Trader
Daily Remy All Time Return: 5.6%
  • #20
  • Last Post: Sep 17, 2023 6:18am Sep 17, 2023 6:18am
Quoting bobsmith
Well I haven't. Sorry if you opened this thread hoping to look at mine. But I haven't seen many news breakout strategies outlined in the trading systems forum. Plenty of market open breakout strategies, but nothing that really covers news events and the volatility that sometimes accompanies them. So if you actively trade the news, how about sharing your ideas here? Or if there is a thread devoted to the topic already, perhaps you could direct me to it. Anyway, I know news is a dangerous game, but I'm here to learn, not to gamble.
Hi, I like to use news in Forex and indices (USD high-impact news). I try to locate two areas on H4 (only on H4, not H1, not m15, no anything else) and wait for the news release. It takes one minute to reach these areas, therefore you have to wait for the first 1min candle to close.

I normally sell if the area is bearish and buy if it is bullish, after that one or two minutes, going in the opposite way price. Price cannot be reversed already, if it already touched two levels, one bullish and another one bearish on h4, then the raid is finished and I stay out. And, obviosly you only trade when that setup comes up, otherwise you wait for your next opportunity.

Let's take an example on last 14th of September with high-impact news during NY preopen 8:15 EST time. This was my setup:

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This specific one, I did not trade it because I was busy, but last week I traded one very similar to it, for instance.

My idea was gettting prices in one of these areas by the news time, then execute accordingly.

Here how it would be.
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You can study your charts and find other days and H4 charts and see how the pattern repeats itself.

To summarize, the technique involves waiting for the price to enter a H4 bullish or bearish area of interest during news events and capitalizing on the momentum to join the expansion. The key information I wanted to share is the timeframe and that it is worth waiting for the first m1 candle to close unless you know very well what you are doing and the spread allows you getting into the market. See this case, in which that technique would make you miss the entry as the first m1 candle already closes below. Does the technique still work if the price has reached the area of interest in less than a minute, and the spread has already returned to its normal size? A lot of terrain to be explored.

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