Trading inside the news spike

In attempt to find a better broker to trade the news I found MBT
- a direct access broker without deal desk.Their terms are looking good but the trading platform is worst I've ever seen and it's actually impossible to trade FX using their MBT Navigator.


- tight stop-loss and trailing stops to 1 pip
- scalping allowed
- no spread
- 0.5 pip comission
- $400 min deposit
- mini-lots available


I'm looking for those who are skilled enough to trade the demo account and
are willing to help me in debugging and testing my own platform
ForexBarometer. In exchange, I offer the software I'm not going to sell or make freeware. Send me a PM if you are interesting in the experiment.

P.S. I am not affiliated with MBT in any way.
If you know another direct access broker who allows to use API,
let me know.
P.P.S. Blue line on the attached graph is a terrestrial magnetic field value

I will have to warn you that even though they might have great spreads and such, every broker wants to make as much money out of you so during the news watch out for: your platform freezing up, your orders taking longer to get filled (and not the average "it's news time" longer fills but I mean "you've got to be kinding!" longer than usual fills) and for the classic spread increase. Believe it or not, every good broker even needs to increase their spread during news time just to cover their butts in case things go completely against them. It's mostly a buffer. The other two are typically blamed on demand during that time but some brokers have more "trouble" then others.

I would help test it with you but I am frankly satisfied with my broker. They are like people: some are good, some not so good but no one is perfect so just find the best one you can find.

I was watching for MBT at news time about 6 months and didn't find much difference with normal market conditions. The Ask-Bid is still about 1 pip and the trading engine is accessible.
My current broker IBFX makes spread as wide as 6-12 pips and my former CMS freezes for 10-15 minutes during the high volatility periods.
This is why I'd like MBT to be tested by several traders. May be you're right and MBT has other drawbacks which prevent it from being a well-known broker.

I traded MBT live for news for a few months, but that was a couple of months ago. And although (as you state), the spreads appear to be constant, you man (will) not be filled exactly at your stop, which has the same effect as widened spreads. I have had up to 20p difference on my fills from MBT during news, but again, that was a couple of months ago. Now, whether a broker widens their spread to 20p at news time, or keeps the same spread, but fills you 20p away, it is all the same $$ to my account.

But I really liked them as a broker. Did NOT like their platform at all....

You have to look at www.interactivebrokers.com ECN market, Commisions 0.2 basis point. For eg. (0.0001) <-- basis point is 1. so spread is 0.00002.

Powerfull API, using different connection clients(socket, activex, dde), compatible with different programing languages(by default).

if u r goin to trade the news, check out {link removed, see rule #2}. this guy has autoclick software that gets you in before the spike. i have no afilliation with him, but he is for real. i hope i am not violating ff rules by posting his address. if so, please disregard.

I am afraid, guys, you are right. MBT is not a panacea for all the brokers' diseases. Yesterday I was watching for Ask/Bid during the FOMC statement rush hour and found the Ask-Bid difference may reach up to 10 pips and above (see the animation attached). At the same time there were moments in 5-6 minutes after the news release when there was zero ask-bid.

Passass, thank you for the link. I couldn't find out if they have demo accounts. Another limitations are:

1. Prior execution of 100 or more trades (any product).
2. A minimum equity deposit in cash or stock of USD 5,000 (or USD equivalent).

What the first statement means? I must provide them a proof of 100 trades?

In terms of the 100 trades, saying you've done so is sufficient. My buddy and i opened up an account without having to show proof.

I trade with Forex.com. I trade 15 minutes after the news. I noticed that sometimes it takes at least 2-3 minutes for my order to register on. this only happens when I hit the ask or buy button. If I put my order in advance the Forex.com executes it flawlessly. Thoughts........ Is anyone else having problems with slippage? Even then my PC might not register the P/L for another minute. So far it hasn't hurt me. But that @$%^^ is scary.

Im retiring my wireless router to troubleshoot any technical problem on my end. Customer service said I might have PC problems. So as a technie I'll eliminate that.

The spikes are accidents waiting to happen. You might get some good runs but if it spikes in both directions it can and will stop you out. Even if you straddle it can sometimes spike just enough to open one or both orders but not enough to give you a win.

Thy Grace is my sufficiency
realatiba

In terms of trading news you're right it often spikes one way and then reverses. The way I trade news is to wait for the result for the report, then let it spike one way (usually the wrong - they do this to run the stops) then trade it when it goes the right way. To trade aggresively you can trade it as soon as it move the right way, or conservatively as soon as it violates the high or low of the previous spike.

Hope this helps.

Mike

I agree with the previous reply.

I try and do both spike and full pullback and if you want (similar to a full pullback), retracement/breakout trades of the spike.

Catch the spike ( which can be difficult without the correct news feed and broker platform) The moment it stalls on a 1 minute chart, take your profits. Beware of big reports. If that 1 minute candle flies 30-50 pips in one direction chances are they are going to whipsaw like grim death. Be lighting fast in those cases. or take you time, wait for a good quick retrace and then enter.

If the numbers come out really good on a good report and it goes the wrong direction (like the last NFP report which totally went the wrong direction - I took 90 pips from this trade) after say 30 min to an hour, then and take an order with a wide stop (in case they try to go crazy further to take out more stops) and eventually it goes the correct direction. You can make a whole lot of pips this way accept you need to be patient , have balls of steel when the brokers try to go after your stop and make sure you take in account the major trend of the week and that your number are really good on a good reports. If the numbers are not so good or the report not too important then there isn't enough juice to kic hte price against the all availing trend.

Keep in mind too that as you near the end of market hours people are thinking of the expected numbers of the next days reports. It's only after the first fews hours that reports come out that they really have any major influence on the market. After that point, everything gets filled away with all of the other weeks/months numbers/reports and then the markets major investors are making their predictions and speculations based on that for the next day. So first few minutes to few hours after a report you might have some opportunity to real know with good authority where the market is heading ( and even then you could be wrong! ) The spike although difficult to trade, it is easily the most predictable and honest and safest trade you can take. Everything after that just involves a whole lot of careful judgement and more risk.


Make sure there aren't any other related important reports coming out after the report you are trading a spike on or price will typically stall.

I will sometimes try and catch a retracement that went the wrong direction. Much like a full pullback but usually happens within the first 15minutes. Again the numbers were super good ( forecast and actual relly off AND the "actual" related to the previous are in the same direction as the deviation that created the spike. Sometimes the surprise reaction moves the markets but the actual compared to the previous influences the longer term price movements most of the rest of the day), let the rest run for a profit on the breakout of the original spike.

Again, to trade this the numbers were really good and the daily range hasn't been fully met, breakout of the spike is alright to take.
Also, do not take a trade after 11:30am NY time. Not enough volatility often times, (unless there is a report due) for price to head your way and you might have to wait until london open for price to move in right direction but by that time the expected numbers for the next day are in full sway and influence the market and it's no man's land again.

Put down pivot points, fib retracments, weekly pivot points, Day's high low's, shi channels, etc whereever you can find possible places where price will stall. These are the times to take profits or noticing where price might retrace/reverse.

Hope this proved helpful or in the very least confusing. Welcome to news trading!:

Name is probably Felix..

You still need a good broker and a cooperative spike and spread.

could you please send me the link, thanks

The problem with trading the spike is not the news feed or the automatization of the process, but rather finding a broker who is able to fill you in before the end of the spike.

I have tried a few brokers and I just cant seem to find any quick enough.

Please send link.
Thanks,
Tom

Try Dukascopy. Jforex platform is extreamely fast.