f(x) News Trading

the other thing about news trading especially in stocks is when a company give bad earnings while price is at the lows the stock will rally....contrarianism baby...same thing happens with forex news...bad news at the lows will almost always cause price to jump and great news at the highs price will always drop since news was already priced in and there no new suckers except for retail traders to buy

I like this thread. I do similar process but different execution. Firstly, I run stats about every pair’s volatility after every news release. I don’t want to predict the direction because it’s too painful. The way I trade it is like if the first minute news release leads to 20 pips volatility and after four hours it’s 50 pips, I could take the rest 30 pips run with 20 pips stop loss. It’s a 1.5R trade. I just have to finger cross for institutions pushes the trade toward my TP. It’s a good idea and makes sense. But it’s a working idea. I know sometimes price hits a big cluster of liquidity and get reversed; and also usually four-hour is probably not long enough for big traders to reprice the asset, if the news is not important enough.

I have already built up a database for the stats part. Now, I have to run backtest to see if this idea is viable. Hope reality won’t hurt me too bad.

I like your idea. I will also look into it to see how it works on some news events. I am pretty sure I can find an edge. Let me know how it works for you.

After backtesting it, I think it works well for some big events. I target 2R but you could get more if you prefer to hold the trade more than a session.

If you would like to discuss this strategy, here is my Telegram ID: @ghovat416. It's OP's post, don't want to grow another branch.