It also depends on your trading strategy too. News can go either way and no one know the outcome of a country GDP or economic eyes. How you position to catch that big fall or jump counts too.
In addition to mentioned above I put also here my enquiry :
Hi everyone! I write to all of you to get your point of view in order to choose a broker according to my trading style : STRADDLE TRADING. In fact, I have started trading some years ago, mainly with technical analysis. Up to now this style of trading takes lots of efforts and time to get a few pips by earning more than I lose. However, I’ve lastly met lots of people trading news (straddle trading ) and apparently they are performing well in getting good pips in a few minutes after the initial spike. Also later on with the fibo retracements. After seriously thinking about it, I finally decided to jump into this “straddle trading”. Ones I took this decision to trade news, I have opened various demo accounts, and I am now testing various possible entry strategies to trade the spikes. The result if very positive in terms of pips, but I guess this is only because I am trading with the Demo accounts. As far as I could read on various websites, the REALITY OF A LIVE ACCOUNT COULD BE COMPLETELY OTHER, not only because of the trader psychology which is difficult to detract from money, but also for the following points: 1) SPREAD INCREASE: The Spread shall be highly increased during the most important news release, and I may be easily wiped out from the market even before knowing the result of the news. 2) SLIPPAGE INCREASE: The slippage which exists between the expected price and the real execution price increases as well, and therefore, I could get the execution at the end of the spike very often. 3) NON LIQUIDITY: The “Lack of Liquidity” in those moments not only, gives a bad execution prices, but also, bad order filling. Therefore, I may risk not to be able to close (or open) the position at the right time during the few minutes of the spike. 4) FREEZED SCREEN: Various dishonest brokers can freeze your MT4 platform in those moments and you can stay trapped in a loosing position. 5) STOP HUNTERS: One minute before the spike, the MM’s can move the market up and down in order to hunt all possible stop losses before the spike, therefore, I would be involved in a risky situation to place the order before the news release. According to what I could read on various web sites, points 1, 4 and 5 correspond to Marker Makers. Points 2 and 3 to ECN companies…. After mentioning all this concerning the Spike trading, I would like to know which is your point of view on the subject, and of course hear your possible recommendations in terms of brokers to trade the news. I believe that all things mentioned above are absolutely true in the majority of the brokers, but I also believe, that a few honest brokers surely allow a day trader to trade news. Furthermore, I still believe that many traders do day trading for a living by trading news. Otherwise, “Straddle Traders” would not exist. Thanks to all of you for having had enough patience to read all my post up to here, and I wait for your feedback on the subject. Cheers, PFX [email protected]
