Is trading spikes really possible?

As far as I know, there are no more brokers/market makers who don't widen their spreads during news. And if you are a very successful news trader, a lot of them ask you to close your account or freeze your account during news.

I am wondering if individual traders really can trade spikes these days.

imho trading spikes is not a viable strategy. when fx brokers honored all stops (not sure what they were smoking to offer such a thing) there was an inefficiency that you could make money from. but other than that i think spike trading is just another way to gamble without having the odds in your favor. over the past year it has seemed that fading spikes is a lot better than trading them.

Not sure I fully understand the concept of fading. Is it about waiting for the spike to end and then trading the opposite direction? How do you really know that a spike has ended?

I agree with it. Sometimes spikes slow down and look like they are going to end but continue to move again.

well, its not easy to know when the spike has run out of steam. it takes experience, plain and simple. we have discussed this concept quite a few times on the forum, do a search that includes "fade" and you should find some goodies.

btw, if there were a simple rule to it, then you would know right off that it is BS. simply following some rules will never make you money, NOTHING easy makes you money long term. there are some that will disagree, but i doubt anyone with any significant experience would disagree with that. news trading takes experience, you have to have a good understanding of the market dynamics and the players behind the orders. any monkey with a keyboard can toss out orders during news, but to make money long term you must really understand whats going on.

Well dammit, there goes my whole strategy of hiring primate consultants and ruling the spot market. Good thing they're still raking in the dough from my online poker operation.

News trading may look really good on paper, but its actually something that is very difficult to succeed in..... I must confess when I started I went to one of these free seminars...and they were advocating straddling the news events and I thought it was the best thing next to sliced bread!! goes without saying I blew my account straight to heaven....( it was a mini account so it was not bad but still I didn't pluck that money from a tree!!)

The moral of the story.....without sounding too gloomy is...the key to news trading the SPIKE...is to get into the trade in the direction of the spike or the adjustment or a few seconds into it.....for that U need a really fast news service and really fast/good broker and really fast fingers........now the last requirement u can practice on your TV remote.... but getting a news feed can be quite costly and u may really have to shop around for a broker........and even that...only a handful of news events in a month will move the market enough to make it worth while to actually trade.....

I think if you are new...the best thing would be.....watch as many news reports as you can, waking up at all hours, get a hang of how the price moves......if u wish u may back test using previous months charts to get a hang of market movement ( I generally tend not to coz trading the left side of the chart always gave me more profits than the right!!!!!) But do place demo trades to get a hang of how the price moves......

Personally I think a person who is just starting off should concentrate more on longer term strategies.....use news trading only as part of your arsenal but do not rely on it for consistent profits......

So to answer the question....yes spike trading is possible but only to be used very sparingly if u know what you are doing....and the only way to know what you are doing is to gain as much exposure to news events as you can and educate your self on the working of the market......

Merlin said it : Trading spikes is not trading with odds in your favour.
I say : Trading spikes is not trading.

Happy trading

Bluefish

LOL!!!

i would have said it myself but didnt want to offend anyone

I can't see the point of trying to get in before the spike. Far too much stress and hassle. Why not just wait till after the spike and trade the market's reaction to it and to the figures released. A much clearer and simpler way to trade.

I agree, after a large spike, it is usually a quick way to pick up some pips, stress free.

Yeah, but in which direction? You mean straddle after the spike?

I do not trades the spikes but I do with the fades as Merlin said.
Nevertheless, I still watch the spikes very closely. The best explanations, comments and analysis which I enjoy most is that of Felix ( SFS ) If you want to call him a gambler, he is a good one. Permit me, this exception, to post for once what I receive ( FREE ) from him each day before midnight. This one is for this afternoon CET

Hi Highway300,
Okay...let's now talk about the day tomorrow ═ I am very excited.═ We have a few decent trading opportunities.

1.═ Tuesday, February 27th, 2007 (8:30 am New York Time) USA
We have US Durable Goods coming out.═ Basically durable goods are orders that are placed to local manufacturers and companies for goods that have a lifespan for over 3 years.═ We have three numbers.═ First is Headline Durable Goods, which includes all orders.═ Second is Durable Goods X═trasportation, which excludes all transportation related items, like cars, airplanes, etc.═ Third is Durable Goods X defense, which excludes all items that were placed by the military, like machine guns, tanks, etc.═ The number that most traders and economists focus on is the Durable Goods X Transportation, and I will focus on that as well.═ This indicator has some importance, but it's not that important, and it has a lot of components, which complicate the situation a bit.═ So the moves on this report are usually quite fast and not sustained, unless the deviation is huge.═ And even then...remember last month?═ The X transportation number came out at 2.3% versus 0.5% expected, there were no conflicts, and we only saw a quick spike on GBP/USD of 30 pips, and then the price turned around, and went over 50 pips in the opposite direction.═ This month, the expectations of this number are at -0.2%, but the consensus among economists are all over the place, mostly leaning towards a negative reading though.═ If the number comes out at 1.5% or higher, it should be good for the dollar, so you can possibly go═short on GBP/USD and expect around 30 pips move.═ If the number comes out at -2.0% or more negative, you can possibly go═long on GBP/USD and also expect 30 pips move.═ If you don't have Secret News Weapon or any other program that can get you in before the spike, I strongly recommend not to chase the move, wait and only get in if the price comes back to pre-release price.═ Also, watch out for the headline number, and it conflicts, I recommend staying out.═ I may personally trade with less conservative triggers than I gave you, but since a lot of beginners receive my signals, I prefer to give safer triggers in my emails.

2.═ Tuesday, February 27th, 2007 (10:00 am New York Time) USA
Then we have Consumer Confidence and Existing home sales coming out of the US.═ It is expected that consumer confidence will come out at around 108.5, which is lower than previous reading of 110.3.═ Existing home sales are expected to come out at 6.24M.═ Both numbers are important, however, existing home sales generally don't deviate that much.═ Economists can predict this number very accurately.═ Because of that, my focus for initial spike will be on consumer confidence.═ If that number comes out at 111.0 or higher, it would be the highest reading in several years, should be good for the dollar, and we might see GBP/USD go down by around 50 pips or more.═ If the consumer confidence comes out at 105.0 or lower, it would be a huge drop from last reading of 110.3, so bad for the dollar, so we might see GBP/USD go up by around 50 pips or more.═ Again, I personally will probably use less conservative triggers, but if you want to be on═a safer side, these triggers are good.═ Unlike durable goods, if you don't have Secret News Weapon or forexdiamonds.com service, you may want to chase this position, as long as there are no conflicts on housing number, and you can get in within 15 to 20 pips of the initial move or better.═ Of course if there is a conflict on existing home sales, the move will probably be muted, and possibly even reversed...depending on how bad the conflict is.═ So if existing home sales conflict, I would get out rather sooner than later, or not trade at all.═

3.═ Tuesday, February 27th, 2007 (6:50 pm New York Time) JAPAN
Then we have Industrial Production and Retail Sales coming out of Japan.═ Believe it or not, but═traders don't really care much about═Japanese retail sales readings.═ It makes sense...since everybody focuses on the exports component of this small country with second largest economy in the world.═ And obviously exports heavily depend on industrial production, which includes both mining and manufacturing...obviously mining is a very small component, because there is not much to mine in Japan ═ If the Industrial Production comes out at 0% or higher, it would be good for the yen, so we may see USD/JPY move down by around 50 to 60 pips.═ If the Industrial Production comes out at -3% or more negative, it would be the biggest drop since February of 2004, and probably would be bad for the yen, so we may possibly see USD/JPY go up by 50 to 60 pips.═ If the triggers are hit on the industrial production, I wouldn't worry too much about conflicts on retail sales, unless the═retail sales comes out deviating by 0.5% or more and is in the opposite direction, and even then it may be a good idea to get in at a better price and still go towards the direction of industrial production.═ It may take up to 1 hour for this move to fully manifest, assuming that my triggers are hit.═ So, if you don't have a program to get you in before the spike, and my triggers are hit, you may want to chase, as long as your entry is within 15 pips or better.

That's all for tomorrow ═ No matter what happens...don't worry...be happy

Trading news in general is bad for your health. Way too many folks trying to get their orders in at the same time. Crazy spreads, and all those other unpleasantries.

P.S. Speaking of crazy spreads - InterbankFX have been really getting to me lately. For the first time in 3 years I'm thinking of changing my broker. What those F-ers are doing during news time might be considered justifiable - but during normal sessions it's criminal. I'm tired of paying GBP/JPY spreads on the GBP/USD... I'll murder those fools.http://forexfactory.com/images/icons/icon10.gif

Good times,
MM

Try realtimeforex. But unfortunately it is not MT4.

what brokers, except interbank, support MT4?