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Question short term trading big news releases

  • #1
  • First Post: Oct 24, 2018 9:49am Oct 24, 2018 9:49am
We've seen what both US bearish new home sales and the Canada interest rate release did to USDCAD today.

I'm a newbie when it comes to trading news and i have a question concerning these huge sudden moves. Is it wise to place both a buy and a sell order a minute before the release with a stop loss for both of them a couple of pips above and below the previous 10 minute range for example?

The upside would be, the second the news hits, 1 stop loss is triggered by the big move while the right buy or sell order is still in place and would be highly profitable.

But - the bigger the news, the more chance of a gap. Like this USDCAD move just yet. And when you have your stop loss in that gap range, it isn't triggered.
In the case of this news, your sell order would have made huge profits but your buy order would still be in place because it skipped the stop loss, making a huge loss. Right?
  • #2
  • Oct 24, 2018 12:00pm Oct 24, 2018 12:00pm
It will work until it doesn't. Often enough the headline shows a number that causes a reaction but the details of the release shows a different story and price reverses. You are far better off actually doing the research and trading the news properly instead of setting traps both ways.
  • #3
  • Oct 24, 2018 1:40pm Oct 24, 2018 1:40pm
Quoting muotre
We've seen what both US bearish new home sales and the Canada interest rate release did to USDCAD today. I'm a newbie when it comes to trading news and i have a question concerning these huge sudden moves. Is it wise to place both a buy and a sell order a minute before the release with a stop loss for both of them a couple of pips above and below the previous 10 minute range for example? The upside would be, the second the news hits, 1 stop loss is triggered by the big move while the right buy or sell order is still in place and would be highly...
As a novice I'd leave news trading well alone, it can be done but it definitely is not for the newbie without a lot of study and understanding about how markets work!
  • #4
  • Oct 24, 2018 1:55pm Oct 24, 2018 1:55pm
Fx is driven by news so leaving it alone even as a new trader is a disadvantage. All you need is 3 to 6 months of solid research and testing ideas and logging the outcome and you will definitely start finding success. I don't know why there is such a haze cast over news trading by retail traders. It is such a profitable way of trading and you don't need to sit at your charts all day. You can literally make money using the economic calendar as your schedule to trade. I know it seems easier to follow the technical route because it isn't difficult picking out ideas you see visually on charts and try make money off it. The problem is you only have to look at the stats of success on that path to realise that all isn't what it might seem. Don't be discouraged by what people say about it. In the beginning it will feel overwhelming but I assure you it all starts to fall into place and trade ideas will flow.
  • #5
  • Oct 24, 2018 2:00pm Oct 24, 2018 2:00pm
You can also swing trade using the same process with news being a catalyst to trigger a trade.
  • #6
  • Oct 24, 2018 2:11pm Oct 24, 2018 2:11pm
Well fair enough go by what ecoTrader says, I'm not the expert on news trading here.
But I would agree with him on technical trading, it does look easy but in my opinion gives you no edge to your entries and is just not worth it, I never use it..
  • #7
  • Oct 24, 2018 2:16pm Oct 24, 2018 2:16pm
That's interesting rover, you don't use technicals so how do you analyse the market? Are you a fundamental swing trader?
  • #8
  • Oct 24, 2018 2:48pm Oct 24, 2018 2:48pm
Quoting EcoTrader
Fx is driven by news so leaving it alone even as a new trader is a disadvantage. All you need is 3 to 6 months of solid research and testing ideas and logging the outcome and you will definitely start finding success. I don't know why there is such a haze cast over news trading by retail traders. It is such a profitable way of trading and you don't need to sit at your charts all day. You can literally make money using the economic calendar as your schedule to trade. I know it seems easier to follow the technical route because it isn't difficult...
Thanks, this is what i came to as well.

I'm not a new trader btw, i have been making steady profits for the past 2 to 3 years or so, just with a whole different method.

I want to add news trading for exactly for the reasons you described.
  • #9
  • Oct 24, 2018 2:56pm Oct 24, 2018 2:56pm
Quoting muotre
{quote} Thanks, this is what i came to as well. I'm not a new trader btw, i have been making steady profits for the past 2 to 3 years or so, just with a whole different method. I want to add news trading for exactly for the reasons you described.
Best of luck with it. I have been toying with the idea of taking another stab at technicals but with a fundamental backdrop. I don't use any technicals currently to trade. So I normally trade news events and do the occasional swing trade. What I want to do but need some research time to do it is use the news as a filter and apply one or more technical setups. The research I want to do around this is assess the quality of setups off the back of supporting news and also outside of it. I hope to identify a correlation. Like you I am looking to add but the other way around I guess. I am looking to add another 5 percent or so to my existing return rate.
  • #10
  • Oct 24, 2018 4:51pm Oct 24, 2018 4:51pm
Quoting EcoTrader
That's interesting rover, you don't use technicals so how do you analyse the market? Are you a fundamental swing trader?
No I don't use fundamentals either, I use pure probabilities currently on EUR/JPY
I enter on the M30 and use the previous day's close for direction! It's as simple as that!

I do no analysis at all and tend to ignore news. I use a strict money management method trailing my stop

All very simple stuff, but it works for me

Trading is all about a series of probabilities and my method relies upon catching runners which are more common than you'd think
  • #11
  • Oct 24, 2018 10:50pm Oct 24, 2018 10:50pm
I see it all the time with risk events being catalysts for nice moves so I'm with you on that in terms of regularity.
  • #12
  • Oct 25, 2018 12:43pm Oct 25, 2018 12:43pm
Quoting EcoTrader
Fx is driven by news so leaving it alone even as a new trader is a disadvantage. All you need is 3 to 6 months of solid research and testing ideas and logging the outcome and you will definitely start finding success. I don't know why there is such a haze cast over news trading by retail traders. It is such a profitable way of trading and you don't need to sit at your charts all day. You can literally make money using the economic calendar as your schedule to trade. I know it seems easier to follow the technical route because it isn't difficult...
Well, that's the path I'm walking on, good to know I'm not alone
  • #13
  • Last Post: Oct 25, 2018 1:30pm Oct 25, 2018 1:30pm
I wait at least 30 minutes before a red figure before starting to trade again .... I don't have any positions going on one hour before red figures ...
doing otherwise has been one of my consistant mistakes in the past ... it took me an eternity to figure out that ... now I just trade technicially ...
MTF PA with indicators = a winning team
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