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how about news trading, can it work?

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  • news (release) trading is a stable way to profit?
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  • #1
  • First Post: Edited 7:01am Mar 26, 2009 5:56am | Edited 7:01am
assume 1:1 position=acc size, normal MM (2% stop/loss)

I just mean with a fast broker like ecn / mbtf or intbrk and market order

is it possible to catch a right direction (I mean, >50% times right) and make 50pips each time?

pls help tell your opinion by the vote button
  • #2
  • Edited 4:45pm Mar 26, 2009 12:20pm | Edited 4:45pm
For me and the ones who have learned the process, when dealing with the US market, watch for what direction the price is moving BEFORE THE NEWS, including the night before, and then understand that if the FINAL trade will be LONG, the banks are pushing the price DOWN so as to have the greatest runup possible and vice versa ---- if the price is going up, it will continue going up to the H1 top resistance level, and then the banks will SHORT the danged thing all the way down !

Once you look for it, its pretty danged simple to see whats going on, and you can easily work for first position for at least 30 minutes and the second position for the rest of the day.

enjoy and trade well

mp
  • #3
  • Mar 26, 2009 4:27pm Mar 26, 2009 4:27pm
Take care with news trading.

Just do some back testing and you will see how with the same indicators, the signal can one day go 300 pips up in 30 minutes and in the next month, it can go down 300 pips. Even the PROs fail a lot of times when they trade the news. After the news happen everyone will tell you why the signal moved that way, but before it happens, NOBODY is able to tell you what can happen.
Why do we fall? "So we can learn to pick ourselves up."
  • #4
  • Mar 26, 2009 4:46pm Mar 26, 2009 4:46pm
LOL --- not to argue, but we get it right every single time --- just read my post below and you can also !

enjoy and trade well

mp


Quoting ForexDude
Take care with news trading.

Just do some back testing and you will see how with the same indicators, the signal can one day go 300 pips up in 30 minutes and in the next month, it can go down 300 pips. Even the PROs fail a lot of times when they trade the news. After the news happen everyone will tell you why the signal moved that way, but before it happens, NOBODY is able to tell you what can happen.
  • #5
  • Mar 26, 2009 10:50pm Mar 26, 2009 10:50pm
I agree with forexdude here, I don't really think anyone can say which way the market goes with a news release. Sometimes the market goes up the new is released and the market shoots up even higher, other times it goes down. It depends on peoples expectations of what the news will be, even with polls its very hard to gauge. I think its best for most to stay away from news trading.
  • #6
  • Edited 11:53pm Mar 26, 2009 11:07pm | Edited 11:53pm
hi, guys, thanks for the inputs
I'll come back with more thoughts, I tried yesterday seems eur time news is ok.

US news during dow open and strong up/down trend is nothing compared with the giant stock market moving.

also broker slippage is a little problem, right now I don't have a live acc that can trade news, slippage and spread issue.

so my try may not be valid. anyonetrying this with ecn?
  • #7
  • Mar 26, 2009 11:27pm Mar 26, 2009 11:27pm
Quoting billye
hi, guys, thanks for the inputs
I'll come back with more thoughts, I tried yesterday seems eur time news is ok.

US news during dow open and strong up/down trend is nothing compared with the giant stock market moving.

also broker slippage is a little problem, right now I don't have a live acc that can trade news, slippage and spread issue.

so my try may not be valid. anyway trying this with ecn?

news is designed for only one thing .. to mess with your trade and your mind,

Often price can be marked up or down on good or bad news100 pips only to reverse next candle 100 pips pr more. Why ? because pros only sell into strength and buy into weakness. slippage and whipsaw are major issues during news time.

Honestly i think those that think they can make more pips trading news are gamblers ..... the market moves hundreds of pips every day right now so why trade news ?

gj last 24 hours has moved 700 pips in ranges of over 80 pips on a 5 min chart ...no news trading needed to make a few pips
Blogging daily now at www.volume.zone
  • #8
  • Mar 26, 2009 11:54pm Mar 26, 2009 11:54pm
Fugly

TRY THIS ! (on a demo or on paper)

understand that the banks have tons of analysts working on this every second, as well as some well placed "moles" (well, thats supposition, but i know i would do it if i ran a central bank) so they have a pretty danged good idea of what the news is, what effect it will have, and trade accordingly.

the action of the price before the news release will give away what will happen, and you only need WATCH a few times to confirm what i say.

if the news will be GOOD, the price DROPS during the night and definitely before the news and will continue dropping for the first half hour after the release with everyone scratching their heads because the news was GOOD.

What happens is THEN, once the H1 or H4 support is reached (usually around 10am est) THE MARKET REVERSES and UP SHE GOES, just as if it was all planned (cause IT WAS all planned)

reverse the situation for BAD news, and you can now see why i LOVE news, dont worry about slippage cause im already in the trade before the news release, take the REAL direction trade after the half hour, when things slow down, and set my tp points based on the visible support and resistance areas on the higher timeframes.

IF YOU WATCH, and take note of what happens and how the prices are moved, you will be AMAZED at how simple it is to trade news, but if you try to catch the moves, once theyre moving, you get the wide spreads, slippage and all the other stuff everyone complains about !

Before you try it, DEMO the sucker and see if you agree with me or want to throw stones ---- betcha there be NO stones !

enjoy and tade well

mp




Quoting fugly
I agree with forexdude here, I don't really think anyone can say which way the market goes with a news release. Sometimes the market goes up the new is released and the market shoots up even higher, other times it goes down. It depends on peoples expectations of what the news will be, even with polls its very hard to gauge. I think its best for most to stay away from news trading.
  • #9
  • Mar 27, 2009 5:00am Mar 27, 2009 5:00am
looks like worth put up some statistical back testing effort.

but no one can control dow, (except the one who want to ride on hedge funds?)

so news during dow open is to be ignored
Quoting mparker
Fugly

TRY THIS ! (on a demo or on paper)

understand that the banks have tons of analysts working on this every second, as well as some well placed "moles" (well, thats supposition, but i know i would do it if i ran a central bank) so they have a pretty danged good idea of what the news is, what effect it will have, and trade accordingly.

the action of the price before the news release will give away what will happen, and you only need WATCH a few times to confirm what i say.

if the news will be GOOD, the price DROPS during the night and...
  • #10
  • Mar 27, 2009 8:56am Mar 27, 2009 8:56am
With only the simplest of thought in my mind, take a look at what happened overnite and then what happened with the news release, and tell me you cannot predict news.

My present pip count says youre wrong !

we DO discuss this, and many other interesting bits of information over on my thread, where newbs are becoming experienced traders and making money where others say its impossible.

Im sorry, but I TRADE and thats ALL i do !

enjoy and trade well

mp
  • #11
  • Mar 27, 2009 9:45am Mar 27, 2009 9:45am
thanks mparker:

I thought about it and 3 examples given that do not apply
'big guys deliverately do reverse price movement before news announcement, and after news change the trend to profit'.

1. Feb. 5 BoE interest rate reduction, G/U grow before news, and G/U grow after news
2. Mar. 24 Fed buy bond, E/U rise before news, and E/U rise after news
3. today, tiny one, E/U fall before this, and after release (+ than expect?), E/U fall after this.
EUR Industrial New Orders m/m -3.4% -5.7%-8.0%

sorry that there is only limited I can think of base on exp

but I agree that on many occassions, price seem to move in a way that mislead you... basically because of fear and greedy.

but it's hard to believe that news leak before announcement.

Quoting mparker
With only the simplest of thought in my mind, take a look at what happened overnite and then what happened with the news release, and tell me you cannot predict news.

My present pip count says youre wrong !

we DO discuss this, and many other interesting bits of information over on my thread, where newbs are becoming experienced traders and making money where others say its impossible.

Im sorry, but I TRADE and thats ALL i do !

enjoy and trade well

mp
  • #12
  • Mar 27, 2009 10:43am Mar 27, 2009 10:43am
Quoting billye
thanks mparker:

I thought about it and 3 examples given that do not apply
'big guys deliverately do reverse price movement before news announcement, and after news change the trend to profit'.

1. Feb. 5 BoE interest rate reduction, G/U grow before news, and G/U grow after news

and what is GU doing NOW ? ---

2. Mar. 24 Fed buy bond, E/U rise before news, and E/U rise after news

and what is EU DOING NOW ?

3. today, tiny one, E/U fall before this, and after release (+ than expect?), E/U fall after this.

were not done yet !

EUR Industrial New Orders m/m -3.4% -5.7%-8.0%

sorry that there is only limited I can think of base on exp

but I agree that on many occassions, price seem to move in a way that mislead you... basically because of fear and greedy.

not fear --- just greed. the price is taken to where the most profit can be made on the reverse move.

but it's hard to believe that news leak before announcement.

I wont say it does or doesnt cause im not privy to industrial espionage (and it happens EVERYWHERE), BUT the banks already know what to expect from their bunch of analysts, who are invariably right cause thats their job !
enjoy and trade well

mp
  • #13
  • Mar 27, 2009 9:44pm Mar 27, 2009 9:44pm
Quoting mparker
Fugly

TRY THIS !...
well so far news trading hasn't really worked out for me mp sure i made money but i lost it all subsequently. I concluded its best small fish like me stay away from the news. BUT I respect your experience mp and your benevolent nature. I will certainly try what you suggest sometime.

thanks
  • #14
  • Mar 27, 2009 10:08pm Mar 27, 2009 10:08pm
may i simply say that you TRY what i say on a demo, as many times as it takes to understand how it works and then, once comfortable with what you see, try a short trade (usually worth 30 pips or so, even when its a short trade

or simply wait till half an hour AFTER the news and using the H4 and H1 for your TREND, trade with the trend till you hit support or resistance (the bols being a really swell place to exit) or any danged place you wish to get out.

its amazingly simple, once you understand what price movement is telling you before the trade.

Just DONT chase the initial reaction because THAT part of the program is what will kill ya grave yard dead, and its gonna reverse soon anyway, which is why it seems so hard !

IT WILL ALWAYS REVERSE and slap ya silly if you wait too long !

mp




Quoting fugly
well so far news trading hasn't really worked out for me mp sure i made money but i lost it all subsequently. I concluded its best small fish like me stay away from the news. BUT I respect your experience mp and your benevolent nature. I will certainly try what you suggest sometime.

thanks
  • #15
  • Edited 8:02am Mar 28, 2009 7:49am | Edited 8:02am
thanks mp:

I took a look and found that it seems most people were planning to trade GBP GDP and USD data only for yesterday as major data.

the example I picked for EUR indus new order seems to be a minor one.

on GBP GDP data release I was off from work so I seemed to miss the market response...

and by EUR indus new order data, seems market was still moving down by the GBP GDP.

so rather to understand the E/U down move down before as a reverse move before news release of EUR indus new order.

I think it should be a remaining move from the previous GBP GDP data new move. that do you think?

I mean a move before a minor news maybe is not a reverse move.

17:30 GBP Current Account -7.6B -5.8B -8.2B
17:30 GBP MPC Member Dale Speaks
17:30 GBP Final GDP q/q -1.6% -1.5% -1.5%
18:00 EUR Industrial New Orders m/m -3.4% -5.7% -8.0%
18:30 CHF KOF Economic Barometer -1.79 -1.55 -1.37
19:45 GBP MPC Member Tucker Speaks
20:30 USD Core PCE Price Index m/m 0.2% 0.1% 0.2%
20:30 USD Personal Spending m/m 0.2% 0.2% 1.0%
20:30 USD Personal Income m/m -0.2% -0.1% 0.2%
21:55 USD Revised UoM Consumer Sentiment 57.3 56.7 56.6
21:55 USD Revised UoM Inflation Expectations 2.0% 2.2%

Quoting mparker
enjoy and trade well

mp
  • #16
  • Mar 28, 2009 10:47am Mar 28, 2009 10:47am
Quoting billye
thanks mp:

I took a look and found that it seems most people were planning to trade GBP GDP and USD data only for yesterday as major data.

the example I picked for EUR indus new order seems to be a minor one.

on GBP GDP data release I was off from work so I seemed to miss the market response...

and by EUR indus new order data, seems market was still moving down by the GBP GDP.

so rather to understand the E/U down move down before as a reverse move before news release...

Billy I know you are putting a lot of thought into this and trading the news seems like an easy way to make money and I know there are services out there that say they make 70 pips on this news annoucement and 50 pips on that one ... the issues are

1) can your platfrorm fill you fast enough
2) can your platform gee you out of trade fast enough
3) what if gu moves 50 pips in 5 seconds , you get 50 pip of lsippage ( it happens) and then price reverses 100 pips.

I would suggest if any of these news services are trying to sell you something .. ask for a historical account records. .... liekly they do not make money in long run

I honestly think you are better off going to Vegas and throwing your money on a roulette table , than basing your sucess in forex on trading news.

I have been in this game 6 years .... and have seen alot of different things happen on new annoucements

I do not rely on indicators either .. they are lagging ... I use volume and volume spread analysis.

here is gj chart showing areas of high volume pivots ... see how the two daily high volume area 142.70 formed resistance .. this is where the sellers are hanging out then we got move down , formed flag and target is in the 135 range. That is 700 pips based on volume telling me what is going on and where the buyers and sellers are hanging out

I also use this on 5 min charts for intra day scalping

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Blogging daily now at www.volume.zone
  • #17
  • Mar 28, 2009 10:56am Mar 28, 2009 10:56am
here is an example of vsa ..... esignal is tick volume form over 300 interbank sources

this was a nice 120 pip trade in under an hour into the vwap

this is just another approach to trading .. much less risk than new trading

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Blogging daily now at www.volume.zone
  • #18
  • Mar 28, 2009 11:00am Mar 28, 2009 11:00am
another vsa set up that gave me 50 pips

volume and candles / spread tell you a story . It is like when you are young and do not know how to read when you start .... then once you learn to read you can enjoy very complicated novels. Volume is just like that the pros cannot hide.

in gj recently from 141.5 there was a rapid mark up in Asia , then over the next trading day 180 pips up and down ... this is distribution by pros. I am still hold 5 lots short off 145

Trading news is just guess work and hope

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Blogging daily now at www.volume.zone
  • #19
  • Mar 28, 2009 11:19am Mar 28, 2009 11:19am
hi malcolmb:
thanks a lot for your opinions on news trading price movement risks,
I think they are very real concerns.

I was just wondering if mbt-f or intbrker ecn can fill fast enough. (with limit or market order is next question, limit order may not hit, market order may slip)

but recently I also have other puzzle,
when news is out and price don't move yet,
I thought I was lucky to jump in where no one saw the money so I can pick it up.

but reality is price don't move even this news come out better than expected.

the case for example is a minor news...

so seems no matter price move faster than me, or price don't move faster than me.
in either case I dare not to jump on easily.

thanks your demo of vsa, I will reply in another post
Quoting malcolmb14
Billy I know you are putting a lot of thought into this and trading the news seems like an easy way to make money and I know there are services out there that say they make 70 pips on this news annoucement and 50 pips on that one ... the issues are

1) can your platfrorm fill you fast enough
2) can your platform gee you out of trade fast enough
3) what if gu moves 50 pips in 5 seconds , you get 50 pip of lsippage ( it happens) and then price reverses 100 pips.

I would suggest if any of these news services are trying to sell you something .....
  • #20
  • Mar 28, 2009 12:00pm Mar 28, 2009 12:00pm
talking about several day direction I was not so sure. in news trading I was actually meaning enter and exit within 1 hour like that.

it's true that the highs this week has tested support level many times this week..

but the real triggering thing that sends for a break was Friday's GBP GDP q/q bad right?

I have not been able to read a volume data from forex so no idea yet, maybe I can learn
is there a source we can get that forex pair trade volume data electrically? thanks malcocmb.

Quoting billye
hi malcolmb:

thanks your demo of volume analysis, I will reply in another post
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