Fundamentals keep screwing my purely Technical strategy | Forex Factory

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Fundamentals keep screwing my purely Technical strategy

  • #1
  • First Post: Dec 13, 2006 2:33pm Dec 13, 2006 2:33pm
If I am in the money by 75 pips or so, the news usually doesn't affect me. However, if I have a technical setup I seem to constantly get hosed when news comes out.

If I have an entry order, the news spikes to get me in and then I take a loser as it retraces. If I am in a trade, the news spikes against me and I get knocked out with slippage on top of it.

Is this just the way it goes? I have a feeling if I start exiting my positions before news, the market will then rip in my favor and if I cancel my entry orders before the news comes out, the market will trade through my entry price and never look back.

Anyone else have this problem?
  • #2
  • Dec 13, 2006 2:49pm Dec 13, 2006 2:49pm
Quoting jmbtx
If I am in the money by 75 pips or so, the news usually doesn't affect me. However, if I have a technical setup I seem to constantly get hosed when news comes out.

If I have an entry order, the news spikes to get me in and then I take a loser as it retraces. If I am in a trade, the news spikes against me and I get knocked out with slippage on top of it.

Is this just the way it goes? I have a feeling if I start exiting my positions before news, the market will then rip in my favor and if I cancel my entry orders before the news comes out, the market will trade through my entry price and never look back.

Anyone else have this problem?
Significant news events has a way or rendering technical set ups redundant.

As you state if you are in the money by 75 pips or so then you are not overly affected.

I don't enter any new trades directly before any significant news event or directly after - my preference is to wait to see how the market responds and then take a trade (or not take a trade) accordingly. If I was in a trade that was only up about 30 pips and CPI data or Non-Farm was shortly coming out I would choose to exit the trade before the economic report. If the data goes in my favor then I would not be in the trade - oh well - I am a trader not a gambler. If the data does not go in my favor then I have not lost and preservation of capital is the name of the game.

Monaco
  • #3
  • Dec 13, 2006 4:01pm Dec 13, 2006 4:01pm
Got to avoid all news times, in theory 50% chance it'll be in your favour 50% chance it won't be so all breaks even, but sadly they do that spike 1 way then reverse deal at the moment, stopping everyone out before the big move.


Pain getting out before all risky news events for 10mins though.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #4
  • Dec 13, 2006 4:08pm Dec 13, 2006 4:08pm
It's sytanged the system I use news usually lines up for it.

Ot os technical but when you get a signal the news usually lines up in that direction

You need a new system man if yoru tech system doesn't work then it is usless this is the market. The market works lke this find a system that works around it.
  • #5
  • Dec 22, 2006 4:12am Dec 22, 2006 4:12am
I have always believed that fundamental spikes do not affect the major trend in 1 time frame higher....When you are expecting a major news announcement, go to 1 time frame higher usually the 4 hours or the daily if the news effect on price would be significant on a 1 hour chart....Calculate support & resistance levels on this higher time frame and that's probably the level that will stop the spike in either way if the spike ever happens...

The problem you are talking about is very familiar with many short term traders who are trading based on a pure technical setup...In fact, I don't have a solution for this problem excpet telling you to close your position before the announcement & re-open it after the spike fades away...Of course this might have the risk of losing your trade & then getting in back at a premium, but this is the only solution I am having...

Personally I don't face such a problem because my trades are long term trades, so literally 100 pips spikes are nonsense to me...My stops are 200-250 pips at least and profit targets have a minimum of 400 pips to infinity as long as the trend continues in the same direction...


Thanks,

Nader
  • #6
  • Dec 22, 2006 4:19am Dec 22, 2006 4:19am
Have you considered exiting half of your winning trade prior to news?
  • #7
  • Dec 22, 2006 8:03am Dec 22, 2006 8:03am
i read an article that syas December is the worst month to trade. that most people have took their yearly profits and went on vacation. so now people with some money can push the market around. if you follow Elliots Wave especially on a hourly chart you can see this. with news spikes going back and forth with some nasty whipsaw.
  • #8
  • Dec 22, 2006 10:23am Dec 22, 2006 10:23am
i thought august was the worst month to trade.

Quoting jrod
i read an article that syas December is the worst month to trade. that most people have took their yearly profits and went on vacation. so now people with some money can push the market around. if you follow Elliots Wave especially on a hourly chart you can see this. with news spikes going back and forth with some nasty whipsaw.
  • #9
  • Dec 22, 2006 12:23pm Dec 22, 2006 12:23pm
Quoting gtketum
i thought august was the worst month to trade.
All depends on the style/mode used during the month in question. I know several traders here in the factory that racked up considerable gains in August trading against the trend with the counter-trend-trading EA Firebird.
  • #10
  • Dec 23, 2006 9:18am Dec 23, 2006 9:18am
well ok ill agree with that cuz of th eno movement thing but december is is bad too.
  • #11
  • Dec 23, 2006 10:21pm Dec 23, 2006 10:21pm
Strange, December has been very good to me till now..I thought the worst months to trade were September & October...


Thanks,

Nader
  • #12
  • Dec 24, 2006 2:13am Dec 24, 2006 2:13am
Well to me the worst months are the 4th quarter of the year. Maybe it's just me.

Anyway a sound advice for news is that, dont trade when there are news being released!

But that's quite unuseful because nearly everyday, there are reports being released and happenings occuring everyday which moves the forex market like the recent thai stock market collaspe and stuff. So trade either short term or long term, when you trade medium term, news will beat you down rather easily
  • #13
  • Dec 24, 2006 10:22am Dec 24, 2006 10:22am
Fundamentals keep screwing my purely Technical strategy

What a hilarious statement. I laughed out loud when I first read it and have been smirking whenever it pops up in 'New Posts'.

I sail. The statement is like saying: " I would enjoy sailing if it wasnt for the wind ! "

Go to post # 5 by Narafa .. he said it best. Besides, I am laughing too hard to post anything else.


Lou
  • #14
  • Dec 24, 2006 11:55am Dec 24, 2006 11:55am
Quoting Lou
...I sail. The statement is like saying: " I would enjoy sailing if it wasnt for the wind ! "...
i'm an avid land and sea sailor (have even sailed from Hawaii to California on a 41 footer with a few friends). I was also reminded of the times i'd curse the wind cuz the sand was blowing in my eyes...then i got goggles; problem solved.

There are models and methods out there to trade every market. I am not a pure Technical trader as i am aware of world economics and current events that might enfluence a given pair. I've stated this elsewhere; a mentor of mine swears that learning a model that is profitable in a ranging market is applicable to a trending market also.

That said much of my current (past 9 months) studies have been on breakout strategies. Granted some might say even a breakout is just a form of trend continuation, and if the B/O is a continuation, more pips to ya...rather than a short trade to S/R.

Just rambling on a Sunday morn before work on this Eve of Christmas day.
Cheers,
Thom
  • #15
  • Dec 24, 2006 12:48pm Dec 24, 2006 12:48pm
In theory technical analysts believe that everything is factored into price, and hence their technical analysis, including fundamentals. So I believe that if fundamentals are screwing up your technical strategy, your technical strategy is flawed. Also, make sure you're not drawing this conclusion from a small sample size, because every now and then everyones technical strategy is going to be smashed by fundamental releases.
  • #16
  • Dec 24, 2006 12:53pm Dec 24, 2006 12:53pm
Quoting twinchell
In theory technical analysts believe that everything is factored into price, and hence their technical analysis, including fundamentals. So I believe that if fundamentals are screwing up your technical strategy, your technical strategy is flawed. Also, make sure you're not drawing this conclusion from a small sample size, because every now and then everyones technical strategy is going to be smashed by fundamental releases.
excellent post, very much agree

+1 Green box :


Mike
  • #17
  • Dec 24, 2006 12:57pm Dec 24, 2006 12:57pm
Quoting mbqb11
+1 Green box :
Oh my god! You mean it!? You better not be pulling my leg...
  • #18
  • Dec 24, 2006 1:03pm Dec 24, 2006 1:03pm
I did also.. It ends up being something like 12 points... doing my best buddy.




Quoting twinchell
Oh my god! You mean it!? You better not be pulling my leg...
  • #19
  • Dec 25, 2006 9:10am Dec 25, 2006 9:10am
are the least profitable months linked to volitility
  • #20
  • Dec 25, 2006 1:24pm Dec 25, 2006 1:24pm
thin volume markets i think are usually very volatile... see thanksgiving weekend
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