News Time Practices

Im starting this thread so I and others may gain some insight off traders who have some kind of Inside experience about what happens In general regarding Trades at news times, preferably from people who have worked at funds or Banks or any other kind of trading Institution.

I also wouldnt mind hearing from profitable Solo technical and fundamental traders.

Do you take out your pending orders?
Close trades prematurely?
Take trades depending on the news release?

Its a long shot that I get any meaty stuff, but 100% worth the typing time.

Leon

Nobody willing to share their order submission conditions? Surprising.

Due to what Ive read on the subject, I feel its likely that liquidity is much thinner during news releases. Has anyone who has traded in markets where Volume Info Is accessable noticed that this is the case?

PS. Please no comments about Mt4 Tick volume.

How Is volume displayed In these markets where the info Is available? Viewable Liquidity at the current price(IMO) Is a given, but what about at other prices? And up to how far away is it viewable?

First off I am an independent solo trader and have traded professionaly (only job) for just over 5 years. I used to trade the news. Used to absolutely love Non Farm Payroll (used to make a killing every time) untill about two years ago. Everything changed. Depending on the broker the spread can become large, or there can be a large delay on your trade being filled.

I have a great system for the news but it just doesn't work out for me anymore because of the large spreads or the huge delay.

So to get directly to the point I never have a trade active about half an hour before a red (high alert) news event. NEVER. I may have a trade open for an orange (medium alert) news event but I will sit and watch carefully during that time. Green events I don't worry about.

I want to make a strong point though. Understand I ALWAYS have a stop loss in place for every trade I make. ALWAYS. No exception. Anything is possible. A green (low alert) news event could become a huge mover. Anything can happen out of the blue (9/11). Your electricity can go out. Your brokers server can go out and their backups may not work. Etc. Etc. I have been through it all (except 9/11 because I wasn't trading yet).

I hope that helps and best wishes to you.

I agree with Forexpreneur, trading news releases has become too much of a gamble lately. There's too much unforeseen event risk (the news itself), market reaction has become too unpredictable because some of the released data has wider economic implications than we understand, a bad number doesn't necessarily mean it's bad for the economy and visa-versa. Then there's the issue of spreads and fills, marketmakers got wise and aren't giving money away any more, they'll often only fill you across data if they can hedge the position whereas before they may have just filled automatically and hedged aggregate.

I rarely trade news any more unless it's a real no-brainer, and even then I would only trade a fraction of a normal position. If I have trades already open and in profit then depending on the importance of the news I may close them and come back when the market has settled and had a chance to digest the news and got over the initial knee-jerk reaction. If I have trades open which are in a loss then I'll either reduce the position and widen stops or just leave it as it is.

The bottom line is that trading volatile and unpredictable data such as NFP is sometimes no more than a coin toss and a hope and a prayer! It can still be fun to have a punt though, bet a few bucks and hope for the best, but nothing serious as far as risk goes.

If you get a chance then watch Bloomberg around some of the more significant data releases, they have commentary and opinion from some very experienced and knowledgeable analysts and economists and there's always a conflict of opinion. The way I see it is if those experienced people can't agree on a probable reaction to data then what chance have I got!

My advice would be to either avoid it altogether or simply trade technical analysis. If you want to give it a shot then don't be influenced by what others expect, analyse the data yourself and take a view, then trade small positions and don't bet the farm hoping for a fast buck!

Good luck!

Thanks Guys,

I hope your sentiments are shared throughout the trading comunity