How to handle news in an open position?

Hey guys,

the title says basically all about the "problem" I rack my brain about the last days...

how do you handle news releases when you are in an open trade?

SL to BE or set the stop loss about X pips behind the current price?!?

thank you.

bye

Good question. This is what I do for any major news announcement (ie. the red ones in the FF calendar) - please bear in mind I usually scale out of trades in thirds :

* If first partial profit not taken, I exit before news, sometimes only 30 seconds before (sometimes there will be a push to at least p1 in the minutes before the announcement).

* If p1 taken and open position is at least +20, I will hold position with stop at b/e +5 : trading EC & DAX futures, this will usually get me out at b/e if necessary .

* If really major news, eg. NFP or FOMC, I ALWAYS go flat ahead of the news. I do trade a few minutes after a big announcement, but like to see 3 "reaction swings" first. I did very well after the last FOMC.

Going flat ahead of news, especially if the position is looking good and in profit, is difficult until you realise holding the position is just gambling.

The plan is to be a trader not a gambler, right ?

I suppose it depends on which TF you trade. If its daily and upwards news does not play such a part unless it can produce a monumental shift in market sentiment. On 4h and under I guess its best to move to B/E or at least lock in some profit and hope the news helps your trade. Personaly I just trade what I see. If I worried about the news I wouldn't put a trade on.

Anthony

thanks for the answers. i trade on the h1 timeframe so i am affected...

what news do you actually consider from the ff calendar? only orange and red ones?

the thing is i am writing a tool which automatically manages a trade so i need something which the system should use again and again... for example to set the SL 0.5 R behind the current price... but i am not sure if such a method is appropriate for each trade...

Personally I do not think that News has much effect on the 4hr.

I trade 4hrs and do not worry about the news, yes it sometimes does take some of my profit immediately following the news, but ussally continues on its merry way.

About your Q on SL 0.5 R I do not think that it would be appropriate for every trade as every News release has its own nature and that is also true from month to month.

good point. last time I think I gamble on a brown color news,
data was good but price actually did not move...

I go back to check that
found there was red color news before it and data was bad...

so color counts.

y not simply close all before major news , and retakes it when a direction is set after news ...
that way u eliminates gambling to a certain degree ...

Why not just ignore it completely? You cant predict what effect the news will have... half the time it will move against your position, half the time it will move with your position. So whatever you do: stay in your trade, or get out, will work half the time and fail the other half. Might as well just ignore it if you are already in a trade I would say.

that is also a thing i thought about... what do others think about this one?

I'd rather say it really depends on the news and your system. If U are intraday trader u should watch it but in long term it usually doesn't matter. But of course there are news which shouldn't be ignored - i.e. changing interes rates or purchase/disposal of X country's Central Bank some of its currency reserves.

Concluding, its worth to watch the news and think which of them may really take serious impact on current pair.

Regards