System to take advantage of news spikes

Hi.

I have an idea that i would like to have some feedback at.

If there indeed is a spike of a news release (say for exemple: NFP). then i would like to open 1 lot at each pip it moves. A trailing stop loss will be aplly just 1 pip behind.

Exempel: EUR/USD is trading at 1.3005 and the NFP comes out much wors then expected.
The price ofcourse will move...

I would then like to open 1 lot at 1.3010 with a trailing stop loss at 1.3009 that moves with the price every pip i moves. i.e. when the price is at 1.3011 the stop loss is at 1.3010, when the price ia at 1.3012 the stop loss is at 1.3011, when the price ia at 1.3013 the stop loss is at 1.3012 and so on and so on.

But there is more....

when the price hits 1.3011 i would like to open even one more lot at the same maner as describe above with a trailing stop loss just one pip behind...

when the price hits 1.3012 i would like to open even one more lot at the same maner as describe above with a trailing stop loss just one pip behind...

when the price hits 1.3013 i would like to open even one more lot at the same maner as describe above with a trailing stop loss just one pip behind...

and so on, and so on, and so on, and so on, and so on....


It will countine to do this until the price retrace. When that happens ofcourse the stop loss will be hit. The last lot that was opened and did not moved in favour for you will ofcourse be a lose, but every othe lots will be very profitable.

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But my question now is if this is possible at al? I use MetaTrader 4 and i know it is possible to program EA that make trades automaticlly so therotical this would not be impossible i think... but i am no programer of any kind.

Can someone please help me out. I will then test this system at demo, mini and a standard account and after that i will present the results. If it is good wït might be a good way to take advantage of the news spike for everyone in here... if it's not profitable no one beside me have lost money....
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/ JoLi

Have you ever watched a spike? Some happen in the blink of an eye with moves of 30-40+ pips. if anyone has software to send orders to a broker that fast I'm not so sure a broker would go along with that. And even if they could I'm sure it would be short lived. I would focus on developing my own trading system instead of looking for a get rich quick system.

ok, here's the deal, it sounds very nice in paper but in a real live account prices does not go from 1.3005 to 1.3010 so nicely waiting for you to enter, that will be in the Neverland of Perter Pan. In reality the price will jump from 1.3005 to who knows where ... it might be 1.3045, all depends of the numbers, then you really gotta have such a nice broker that will let you enter at the price that you want...boy if it was just that easy to trade the news spikes .....

crl212:

I won't even make a comment to you.... my god....

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ayato:

I understand what you are saying. But i have several times during news put Limt orders 10 pips from the actual price on both sides. When the price spikes i sometimes gets in... i don't say i get in everytime because that would be impossible. But today for exemple i got in at the UK CPI in that way and made around 40 pips.

So what the system would do is upon activation put limit orders at every pricelevel until the price starts to retrace... then the sustem would automaticlly shut down.
Lets say you get in when it's just 8 pips left until the pricestarts retraceing (ofcourse you can't know that it is just 8 pips left, but to show a exempel...)

The math would then be as follow:

Let's say you have 3 pips spread.

1 lot would make -3 (Spread) -> 0 (Breakeven) -> 5 (price hit top/bottom) -> 4 (the price retrace and hit your stop loss) = +4 pips

1 lot would make -3 (Spread) -> 0 (Breakeven) -> 4 (price hit top/bottom) -> 3 (the price retrace and hit your stop loss) = +3 pips Summary: +7 pips

1 lot would make -3 (Spread) -> 0 (Breakeven) -> 3 (price hit top/bottom) -> 2 (the price retrace and hit your stop loss) = +2 pips Summary: +9 pips

1 lot would make -3 (Spread) -> 0 (Breakeven) -> 2 (price hit top/bottom) -> 1 (the price retrace and hit your stop loss) = +1 pips Summary: +10 pips

1 lot would make -3 (Spread) -> 0 (Breakeven) -> 1 (price hit top/bottom) -> 0 (the price retrace and hit your stop loss) = +0 pips Summary: +10 pips

1 lot would make -3 (Spread) -> 0 (Breakeven) -> 0 (price hit top/bottom) -> -1 (the price retrace and hit your stop loss) = -1 pips Summary: +9 pips

1 lot would make -3 (Spread) -> -1 (price hit top/bottom) -> -2 (the price retrace and hit your stop loss) = +-2 pips Summary: +5 pips

Of course 5 pips is not much... but hey... we started when it was just 8 pips left of the spike. What if we get in when it is 20 or more pips left? And what if you broker offers just 1 pip spread.... SUCCESS!


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Well... i don't know if it is possible to make an EA of this. But the idea is to automaticlly put limit orders at every pricelevel until the price starts to retrace.
Unfortunally i can't put limit orders by manually so fast... othe wise i would have done it....

/ JoLi

I've played with spikes for a month or two on a demo account. What I saw last week was that the price (spread) opened wide, like 20 or more pips, just long enough for computers to execute orders, which is not very long. My straddle's entry stop was hit, then, immediately, my stop loss.

Wonder who had the other side of that trade?

So, what I'm saying is, that 15 or 20 of your orders would be triggered, then you'd be stopped out on all of them faster than you can blink.

Fading after the news seems like a good strategy, one that could be learned.

you will most likely be stopped out.

I've tried this technique before. I just buy and sell equal lots 3 or 4 minutes before news. Have a 1 minute chart up.When it spikes or jumps look at the chart and try to anticipate when the spkie is losing momentum. You could enter a trailing stop loss or close the profitable side out, and when it retraces a bit, you have a winner. If it jumps 50 pips and then retraces 1/3 of the way you are still up 16 or 17 pips.

It's tricky and of course if you get out too fast you have a runaway loser. Get out too late then you barely break even. Not the best way but beats the spread widening at news time.