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problem with trading news...?

  • #1
  • First Post: Edited 8:59pm Aug 6, 2008 8:41pm | Edited 8:59pm
Hi guys,

I trade the news sometimes when I feel there is gonna be big movement. So I do the breakout thing...as you all know you set up a limited buy and limited sell...and wait for the market to breakout.

Here is the problem...I use candlestick chart to determine where to place limit buy and sell. And on the candlestick chart, when the news come out, it either hits my buy or sell limit...thats it.

However, sometimes it hits both...but on the candlestick chart it only hits one and then breakout...however, when I choose min and max chart, it does show that it hits both limits. How do I avoid this problem...
  • #2
  • Aug 6, 2008 9:24pm Aug 6, 2008 9:24pm
you try trading like this your broker will rip you off both ways... everytime!

when the news comes out you'll have instant loss in less than 10 seconds...
  • #3
  • Aug 6, 2008 9:28pm Aug 6, 2008 9:28pm
Quoting dragoncat
you try trading like this your broker will rip you off both ways... everytime!

when the news comes out you'll have instant loss in less than 10 seconds...
thanks for that...please explain...
  • #4
  • Aug 6, 2008 10:05pm Aug 6, 2008 10:05pm
which part don't you understand? At major news time most if not all big and institution investors take away their sell/buy orders, leaving both side of the resistance and support unguarded, so right after the news, the price can whip around both sides of the resistance or support without any volume, dishonest brokers can also make up their own prices, thus taking out all the stops and/or orders close by, therefore say if the price were trading 1.5500 before the news, and you try this breakout trick, put in buy order at 1.5520 and sell order at 1.5480, the broker will take both these out, and instantly you're left with a hedged position losing a total of 40 pips
  • #5
  • Aug 6, 2008 10:17pm Aug 6, 2008 10:17pm
Quoting dragoncat
which part don't you understand? At major news time most if not all big and institution investors take away their sell/buy orders, leaving both side of the resistance and support unguarded, so right after the news, the price can whip around both sides of the resistance or support without any volume, dishonest brokers can also make up their own prices, thus taking out all the stops and/or orders close by, therefore say if the price were trading 1.5500 before the news, and you try this breakout trick, put in buy order at 1.5520 and sell order at 1.5480, the broker will take both these out, and instantly you're left with a hedged position losing a total of 40 pips

wait you mention that most big instiution investors take away their sell/buyy orders...what does that mean? I really need your help. Does that mean they dont trade the news? then how does the price jump to one direction or the other so fast? thanks
  • #6
  • Aug 6, 2008 10:30pm Aug 6, 2008 10:30pm
basically what everyone has been trying to tell you is to NOT trade the news. I mean really, why bother?? 20 pips or so every now and then and only if you GUESS right?

Here is the best method of trading the news:

1. 30 minutes before the news, place your left hand underneath your left butt cheek, place your right hand underneath your right butt cheek.
2. Sit on your hands until about 30 minutes after the news.
3. Start looking for a good entry that will give you many more pips without the loss of hair.

Simple easy strategy that is 100% correct. Never misses.

All kidding aside, why not look for much higher probability trades? I don't trade the news just because of what people have described here. If I have a trade that is heavily in profit I will close it near large news events (NFP, Interest rates, etc). If after things settle down when the news has been released I see that my trade is still valid, I will open a new trade. This way the news only cost me a few pips in spread. No headaches no worries about price gapping over my stop and continuing on for even greater losses than I had expected.

Just my opinion though.
  • #7
  • Aug 6, 2008 11:05pm Aug 6, 2008 11:05pm
Quoting xxfunguyxx
wait you mention that most big instiution investors take away their sell/buyy orders...what does that mean? I really need your help. Does that mean they dont trade the news? then how does the price jump to one direction or the other so fast? thanks
Right at the moment the news hit, the liquidity in the market drops to minimum because all banks and funds withdraw their orders to protect themselves against unexpected movement. They don't gamble on the outcome of news. But still some orders are still there from traders with more risk appetite or those who like to gamble( or who think they have the inside information ). Few minutes or seconds after the release, the liquidity gradually returns as big traders decipher the new information and position themselves accordingly.

  • #8
  • Aug 6, 2008 11:21pm Aug 6, 2008 11:21pm
http://www.forexfactory.com/showthread.php?t=7484
  • #9
  • Aug 7, 2008 12:23am Aug 7, 2008 12:23am
Quoting xxfunguyxx
wait you mention that most big instiution investors take away their sell/buyy orders...what does that mean? I really need your help. Does that mean they dont trade the news? then how does the price jump to one direction or the other so fast? thanks
the currency market is just like any other market, there's people waiting to buy at one side and people waiting to sell on the other, before major news releases, professional traders move to cover their risk by covering their high risk positions, and leaving only the lower risk long term trades, thus probably there's low amount of pending orders inside the closest 50-80pips range,
the reason why price jumps in one direction or another very quickly is when the release is too far off from what most people expect, and either they adjust their existing position again, and/or enter more positions, and/or stop losses gets hit etc.etc.
  • #10
  • Aug 7, 2008 12:38am Aug 7, 2008 12:38am
and the reason why the price whips around is because there's lack of volume, seems pretty easy to understand, which part don't you understand?
  • #11
  • Last Post: Aug 7, 2008 6:45am Aug 7, 2008 6:45am
Quoting magnumfreak
Here is the best method of trading the news:

1. 30 minutes before the news, place your left hand underneath your left butt cheek, place your right hand underneath your right butt cheek.
2. Sit on your hands until about 30 minutes after the news.
3. Start looking for a good entry that will give you many more pips without the loss of hair.

Simple easy strategy that is 100% correct. Never misses.



Best news trading method I've seen in ages.

It must have a name. The Butt Cheek Strategy?
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