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US Job Number Trading

  • Post #1
  • Quote
  • First Post: Aug 7, 2004 6:18pm Aug 7, 2004 6:18pm
I was unfortunately on the wrong side of the market when the Non-Farm Payroll number was released on Friday, and I took a big loss.

I am now wondering if it is a smart idea to be in the market when such numbers are being released? I couldn't help but think that if i had been on the right side of the market, I could have made an enormous amount of money, but is it worth the risk?
Quoting youngun
I was unfortunately on the wrong side of the market when the Non-Farm Payroll number was released on Friday, and I took a big loss.

I am now wondering if it is a smart idea to be in the market when such numbers are being released? I couldn't help but think that if i had been on the right side of the market, I could have made an enormous amount of money, but is it worth the risk?
Once I tried to put entry points with tight stoploss just about 20 pips from the market.
But problems with slippages caused me losses.

So, What I do now is at 15:29 buy eur/usd with 20 pips stop loss.
AND Sell gbp/usd with 20 pips stop loss. so i am in the market while things happening.

lat payroll I lost my 20 on the gbp and took 144 on the eur, and thats only because I closed it to early, but you got the idea, take both sides.

Regards.
Regards, Ido
youngun
I was given some reasons why the number of jobs would be low so I had a warning but even if I didn't have some help I would still watch out and not have a one way position on big data. I tried using stops on both sides but its hard to position them accurately becuase sometimes the market moves 100 points other times only 50 points and also getting a broker to guarantee stops isn't easy. Now I'm using options to trade the big news and I take my chances for smaller news with a normal account. Also I found it amazing that options prices were expensive before the number came out and since then I have found out that a massive move had been priced in so some people must have known the number many hours before it came out.
jambotrader,

Did you have "inside" information on the employment figures? If so, would you mind sharing with me next time a report comes out
Dear Jambotrader,

How do options have less risk in this type of situation? And will knowlege in the options market help me in the Forex market? Thank you for your answers in advance. I am thinking about learning about the confusing options trading, but I have not been convinced that it is worth the extra trouble.
Quoting seleana
jambotrader,

Did you have "inside" information on the employment figures? If so, would you mind sharing with me next time a report comes out

I have no insider info. The help came from someone in a fx company and it was their internal estimate. I didn't take a position on it as I never do, instead I use options, but I did set up all of my boxes on all the accounts for buy which saved vital seconds and it got me an excellent fill on the euro and aus.
Jambo what was the estimate you heard? Was it anywhere near the actual number? If it was, do you mind sharing your source?
Quoting youngun
Dear Jambotrader,

How do options have less risk in this type of situation? And will knowlege in the options market help me in the Forex market? Thank you for your answers in advance. I am thinking about learning about the confusing options trading, but I have not been convinced that it is worth the extra trouble.
You know you maximum loss so you can manage your risk in that way. For me its been a good experience. So far I have made 4 profitable trades on data and 1 with interest rates. So far no losers. The system I'm using is very simple to apply but you must do the earlier work in choosing the data. This sounds more complicated than it is and you just use the pointers in the guide to help decide if you should trade the data or not. If you want to know where to get the system I'm using then send me a message/email and I can pass on the details.


Jambo what was the estimate you heard? Was it anywhere near the actual number? If it was, do you mind sharing your source?

I posted the estimate and later the source on the news page of this forum under waiting for the payrolls. I don't know how to do links so you'll just have to go look! The actual number was 32000 and the estimate I was given was 150000 or less. This sounds like a long way out but most people in the market had an average of 230000.
i tried straddle trade like this youngun yesterday on euro...it didn t work for me. there was spike and then my long trade was lost, and then my short trade didnt not get hit so i took of the order. i have try a few straddle trade and i made some, i shouldnt have traded so much on yesterday trade k would still be in profit. !
Dear Icabonk,

I got burned on today's data release also. That was the first time I saw the market spike like that, then totally retrace. My fist straddle trade I only had an order on one side of the market, so ever since I put orders on both sides of the market. My sell trade on the Swissy was stopped out and I never got in the buy trade. I think that is exactly what you are describing as well. I think I am giving up trading on economic data releases. The volatility is too much for a beginner like me to handle.
Quoting youngun
Dear Icabonk,

I got burned on today's data release also. That was the first time I saw the market spike like that, then totally retrace. My fist straddle trade I only had an order on one side of the market, so ever since I put orders on both sides of the market. My sell trade on the Swissy was stopped out and I never got in the buy trade. I think that is exactly what you are describing as well. I think I am giving up trading on economic data releases. The volatility is too much for a beginner like me to handle.

You have to know which bits of data to trade but if you are using straddle stops then you always risk this kind of thing. I used options yesterday for the retail sales and like you ended up with nothing to begin with. Managed to come out with an overall loss of 3 points after about an hour when the euro dirfted down. If I had covered the upside after the data I would have come out ahead but the options were so cheap yesterday that even a total loss would have meant only a fifth of fridays profit or a quarter of fridays stake so that's why I let the topside ride to begin with. Wrong decision, but I can live with 3 points loss. I'm realistic to know I'm not going to clean up everytime so these days are gonna happen from time to time.
Today we have US ppi, I'm not so sure about that in that it can mmove the market but only if it's not as expected. US cpi next tuesday might be the next big mover.
Hi, jambotrader.

I do wonder the price of your options and how many hours before the news announcement you normally buy your options. I am now considering to transfer my news trading in spot to options too, since it becomes more and more difficult to apply straddle strategy in news trading. Dealers like FXCM, CMS, GFT are not fools after all.

I have ever tried Refco's SPOT options, but found its price was too expensive. Even 24 hours before a major news, you may have to pay $100 to Refco for a double one touch options, to get a possible $100 profit (so, zero or -$100 profit actually).
It depends on how much the options cost at the time and I buy them about one minute before the news. Sometimes you can get away with less than £100 but for the non farm payrolls I had to pay about £300 but I did more than double my money I always write off the cost as soon as the trades are done because its the best way but you can break even or make a few percent if the market doesn't move much or rotates in a band. But that has to be done at the time and if I can do it great, but I'm always prepared to write off the original £100 or whatever I put down. These options don't have fixed payouts so you get to keep all of the profit if there is a huge move.
  • Post #14
  • Quote
  • Last Post: Aug 28, 2012 9:11am Aug 28, 2012 9:11am
If you are already in the market and have a nice profit to where you can place a profit protecting stop, then stay in when news breaks; otherwise stay out of market during major news until after news and market stabilizes.
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