ignoring the news | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

ATR indicator of candle body ignoring wick and tail 5 replies

Help...Market Ignoring Fundamentals? 15 replies

meta trader 4 problem:its ignoring tp and sl 3 replies

Ignoring Current Bar 0 replies

ignoring the news

  • #1
  • First Post: Apr 20, 2006 3:46am Apr 20, 2006 3:46am
I am just curious if anyone ignores the news when it comes to trading. If you have an open trade and it is on a good run, Would you want to close out the trade until after the news and see how things go and then get back in the trade? Or would a person take off a certain amount of profits and take a chance that the market will go in their favor? Or would you leave the whole thing on and use a tight trailing stop?
JOHN 3:16
  • #2
  • Apr 20, 2006 4:12am Apr 20, 2006 4:12am
Hello,

It depends on your trading styles....I am using automatic trading and of course totally ignored the news...

Most of the time, the price has already build into the market for the news and normally I didn't have any trade during the news time. (I am using MA so I will be either long or short during that time and it doesn't seem to take any trade during the news time)

Wish u a happy trading!!
  • #3
  • Apr 20, 2006 4:55am Apr 20, 2006 4:55am
Depends. The shorter time frame you trade, the more aware of the news announcements schedule for the day you gotta be since stoplosses and price targets are tighter. If you trade off 4H or Daily charts, then one specific announcement has less individual impact upon your trade, unless it's interest rates-related of course.

I personally make sure there is no major news coming out within the next hour or two before entering a trade. You dont wanna risk price spiking up and getting you at -40 pips barely an hour after initiating your position.

Overall, from what I noticed, strong news might whip the chart up and down for a short period or time, but after a while (say a couple of hours), price resumes moving on its marry way like it used to pre-news.
  • #4
  • Apr 20, 2006 6:52am Apr 20, 2006 6:52am
I think WTB is right, with an added note...

There is no way even the longest term investor totally ignores the news. If you are a technicals only trader, you can still do well, but if you want to be elite, that is the best you can be, and who wouldn't want to be in a game worth millions, you have to be aware of everything that can move the market.

That being said, it is about pips in the bank, style is irrelevent
I keep a close watch on this chart of mine...
  • #5
  • Apr 20, 2006 7:14am Apr 20, 2006 7:14am
I'm in agreement with the above posts on mostly being aware of a news announcement, but for most part not placing much weight on them (Merlin...thx for the little collored factory buildings!). One thing i was taught is that news announcments many times will just hurry the currency on it's way to a natural target such as a FIBO retracement/extension that it was in the midst of reaching. So bottom line for me is i look at news just one more thing to fuel a currency on it's way to a price target.
  • #6
  • Apr 20, 2006 7:20am Apr 20, 2006 7:20am
It can be a bit of a catch 22 situation at times. Close a trade pre-news and the news is in your favour and you find yourself chasing a trade you were already in. Tighten your stop pre-news and the inevitable wiggle shoots you out early.

Personally I used to watch the news, without actually trading it directly, but after many a failed interpretation, decided to ignore the news, and related news services such as fxstreet etc.

Since then news time trading is no harder for me than any other time, technicals tend to still be observed most of the time and I don't bail out of trend changin move.
You can quit and they won't care, but you will always know.
  • #7
  • Apr 20, 2006 7:56am Apr 20, 2006 7:56am
Great!!!

These are the answers I was looking for. I have read quite a bit on how the news can really mess up a winning trade. I have really been trading off 4 hr charts and did not think anything changed an aweful lot. Although reading differant threads, I have been a bit leary on just letting my winning trades become losers or, losing money because I got out. I think not using my time to learn how to trade around news time and what effect certain news will have, and using my time to get a good strategy will not burn me out.



1 pip saved is 1 pip earned
JOHN 3:16
  • #8
  • Apr 20, 2006 8:15am Apr 20, 2006 8:15am
normally whenever there were important news release the market will move around 50-100pips..down or up. now, since there are some fx broker enable one to open long and short at the same time, i wondered if it will be best to open both long and short before the news release and then set the target limit to be 100 and stop limit to be 20 or 30. the logic is that, if one of the trade is on the wrong side.. it will close with -20(or-30) depend on the stop limit set earlier. in the other hand, the another trade will continue to the highest pips from the news lets say 50 pips or up to 100 pips.. so the total pips will be the winning pips minus the losses -20 or -30. so total result is + pips..
  • #9
  • Apr 20, 2006 8:20am Apr 20, 2006 8:20am
the only problem with that is, whipsaw. You could get the -20 loss and then the price would go in the other direction for a few minutes then go right back the other way and you could end up with two losing trades.
JOHN 3:16
  • #10
  • Apr 20, 2006 8:32am Apr 20, 2006 8:32am
Quoting fxpro25
normally whenever there were important news release the market will move around 50-100pips..down or up. now, since there are some fx broker enable one to open long and short at the same time, i wondered if it will be best to open both long and short before the news release and then set the target limit to be 100 and stop limit to be 20 or 30. the logic is that, if one of the trade is on the wrong side.. it will close with -20(or-30) depend on the stop limit set earlier. in the other hand, the another trade will continue to the highest pips from the news lets say 50 pips or up to 100 pips.. so the total pips will be the winning pips minus the losses -20 or -30. so total result is + pips..
Agree FXpro. I do do the same thing. I check first the sentiment of the currency for the day and the probable movement of the charts. Let's say the Euro is supposed to be on a firm stand and the released US data is favourable to the USD, I hedge it. Remove the stop loss of the previous entry. I wait until the confusion related to news report settles and take the profit from the later entry. Put back the 40 pips stop loss into the first/earlier entry. When the trade resimes it's route, I make the second cash in later in the evening or the next day. Not all platform can do that. Only those that take each entry separately. Example MT4

Highway
  • #11
  • Apr 20, 2006 1:44pm Apr 20, 2006 1:44pm
Here is how I trade the 4:30am UK news. Usually, the UK news can be pretty large on the GBP/USD, and the EUR/USD doesnt even move.

We are looking for 30-70 pips.

You just wait until about 4:29, and place a limit order 10 pips above and 10 below the current price, Your stop only has to be about 10-15. This has won the last several times I have used it! Althought I havent been around for too long to check it out.
I keep a close watch on this chart of mine...
  • #12
  • Apr 20, 2006 4:23pm Apr 20, 2006 4:23pm
Place buy on both EUR/USD & USD/CHF one minute before announcement comes out. 10-15 pip SL. One will go up & the other down keeping you in one of the two trades.

FYI, I'm reposting this cause I accidentally deleted it while editing.
  • #13
  • Apr 20, 2006 4:30pm Apr 20, 2006 4:30pm
I read somewhere that the release of the NFP is not having as drastic affect on the markets the way it used to.

This however is just what I read.Could be totaly wrong, anyone know?

Quinn
I started out with nothing, and I've got most of it left!
  • #14
  • Apr 20, 2006 5:15pm Apr 20, 2006 5:15pm
Quoting bonmeister
Place buy on both EUR/USD & USD/CHF one minute before announcement comes out. 10-15 pip SL. One will go up & the other down keeping you in one of the two trades.

FYI, I'm reposting this cause I accidentally deleted it while editing.
Hi Bonmeister

Ref to your quote above, this is not how to trade for a living!!! Is this not GAMBLING or were you joking?

MM
The greatest achievements are those that benefit others....
  • #15
  • Edited 6:46pm Apr 20, 2006 6:01pm | Edited 6:46pm
mm,

1st, I've read many of your posts and respect your knowledge and insight. This strategy does work. My initial post was accidentally deleted and it contained the following info... (I got lazy and didn't want to type it all back in). I was actually hesitant to post this because I know there are a lot of good traders here and I was intimidated by that because I am presently a mediocre trader at best. FYI, this is not my strategy but one that was passed on to me by people that are using it successfully on a weekly basis.

For USD sensitive announcements only. The USD/CHF and EUR/USD at most times are mirror images of one another. As one goes up, the other goes down and vice versa. If a buy (or sell) is placed on both pairs at the same time with an appropriate stop loss you will end up with one pair in profit and get stopped out in the other pair. Note that you must buy or sell on both pairs. You cannot buy one and sell the other... This is in effect no different than putting in an entry order for sell and an entry order for buy on a single USD pair. Look back thru history and see how the EUR/USD & USD/CHF mirror each other...

This method has worked for me in demo and in live acct. I do not trade annoncements much (maybe 8-10 times total) and I have had profitable trades in at least 5 of those where I made 30+ pips (chart pips). I would rather actually sit back and watch an announcement catapult the price action to a more predictable, less-risk level than trade it.

I would never use this on an NFP report as you will get whipsawed to death and get stopped out in both directions.

I'm just adding this to the list of so-called strategies for trading announcements.

No doubt the best way to trade annoncements is to have a live feed of the RESULTS of the announcement to base your entry upon after the announcement has been made. Homework is required also.

Sorry to confuse or mislead anyone. It is just a simple method I have used. I can take criticism, so blast me if you like. Its also not my intent to have anyone here lose pips. I would expect anyone to try a new method in their demo acct before going live with it, and if it doesn't work then sh*tcan it.

I'm very open-minded and any responses good or bad can only make me a better trader.

mm, I am here to learn and I did sit up and take strong notice of your inquiry about this method.

Sorry for the long winded response, but I'm at work and trying to squeek this in between my dayjob routine.

Quoting mmbmusa
Hi Bonmeister

Ref to your quote above, this is not how to trade for a living!!! Is this not GAMBLING or were you joking?

MM
  • #16
  • Apr 21, 2006 6:10am Apr 21, 2006 6:10am
highway- would you mind attaching a screenshot example
of this strategy?


Quoting highway3000
Agree FXpro. I do do the same thing. I check first the sentiment of the currency for the day and the probable movement of the charts. Let's say the Euro is supposed to be on a firm stand and the released US data is favourable to the USD, I hedge it. Remove the stop loss of the previous entry. I wait until the confusion related to news report settles and take the profit from the later entry. Put back the 40 pips stop loss into the first/earlier entry. When the trade resimes it's route, I make the second cash in later in the evening or the next day. Not all platform can do that. Only those that take each entry separately. Example MT4

Highway
  • #17
  • Apr 22, 2006 6:38am Apr 22, 2006 6:38am
Quoting bonmeister
mm,

No doubt the best way to trade annoncements is to have a live feed of the RESULTS of the announcement to base your entry upon after the announcement has been made. Homework is required also.

Sorry for the long winded response, but I'm at work and trying to squeek this in between my dayjob routine.
Hi Bonmester

Thanks for your response. There is no long winded response, we all learn from what we all have to say. Regarding News and Trading, i personally don't think that anyone wanting to be an A trader can ignore the news. We can stay out of the market when major news are about to be released but we certainly cannot ignore major news.

Also, no one knows what the market is going to do before any major news releases. This is why we go back to our tested trading system with strategy and use technicals, good money management and Iron Discipline.

The following quote by Merlin a while back shows how Cable move 100pips before a major news release.

Quote:
Originally Posted by vdeluca

If that is true, then you have discovered a gold mine. The banks would have to know in advance what the announcement numbers are going to be, otherwise they would not know which direction to send the spike. If the spike was in the post-announcement direction, then it would not BE a spike. So, all you would need to do would be to watch the market a few minutes before the numbers are announced, and put on a position OPPOSITE to the pre-market movement.



it happens so fast it would be hard to capitalize on. did you see that spike live? the GBP covered over 100 pips in like 3 seconds! you may make money on some straddle trades, but in other instances you loose your shirt. there are guys out there who can make money at it, i personally always got burnt.

__________________
Merlin

A good link to read (i don't trade this strategy though) is:
http://www.forexfactory.com/forexforum/showthread.php?t=385&page=2&pp=15

Happy Trading
MM
The greatest achievements are those that benefit others....
  • #18
  • Apr 22, 2006 9:37am Apr 22, 2006 9:37am
Quoting quinn
I read somewhere that the release of the NFP is not having as drastic affect on the markets the way it used to.

This however is just what I read.Could be totaly wrong, anyone know?

Quinn
It depends on the context of NFP. The phrase "like it used to" probably was referring to pre-election NFPs where the price would actually gap more often than not, at least 100 pips or so.

NFP is a strong economic indicator, however combine NFP with the possible effect on a presidential election and you have a TOTALLY different aspect of the NFP. In general, weak NFP would be bad for a president seeking re-election. That's why in 2004 (especially the 6 months leading up to the election), NFP was waited for with bated breath...seriously...if there was any hint that there would a regime change, the investors took note. Under the GENERAL understanding, the GOP is more economy friendly (although statistics don't necessarily support or disprove any of this). They are seen as the party that will cater towards corporations and create legislation that will be more capitalistic friendly. This is just a perception and probably the opinion of a lot of the people here...whether it's true or not, I don't know...but any trader has to be relatively aware of this.

Anyway, back to the NFP (and any other major economic indicator) "back then"...the effects were magnified because with the economy trying to make a break-thru, any negative NFP was seen as one more nail in the coffin for the GOP.

The effects of the NFP are a little more muted these days because there isn't really that same paranoia related to Bush possibly leaving office. Don't get me wrong, NFP still carries some weight, and this being an election (senate) year it's possible we'll get some more "movement" closer to the election.

Remember, understanding the context of the news will always make you more effective in actually trying to decipher it.
  • #19
  • Apr 22, 2006 10:00am Apr 22, 2006 10:00am
Hey guys,

This is a question for Puppy or anyone else who whould like to reply. Excuse my ignorance, but I am a newbie. Puppy, you mentioned that use use an automated trading system. How do you do this? I have noticed that some brokers will let you feed them your trading signals and they will automaticly place the trades for you based on your system. Is this what you do?

Also, you stated that you use moving averages. I'm sure that you probably use some sort of crossover to start your initial position, but how do you close them? Do you wait for the corssover in the other direction after your position turns, or do you use stops to close them and wait for the next crossover? If your using stops, how does this work with an automated system? Waiting on the crossover after your position turns in the oposite can sure cause you to lose a lot of your profit. On the other hand, you can also lose a lot of potential profit if you close the position too early. How do you guys deal with this.

Thanks
  • #20
  • Edited 10:17am Apr 22, 2006 10:10am | Edited 10:17am
Quoting basuccess7
Hey guys,

This is a question for Puppy or anyone else who whould like to reply. Excuse my ignorance, but I am a newbie. Puppy, you mentioned that use use an automated trading system. How do you do this? I have noticed that some brokers will let you feed them your trading signals and they will automaticly place the trades for you based on your system. Is this what you do?

Also, you stated that you use moving averages. I'm sure that you probably use some sort of crossover to start your initial position, but how do you close them? Do you wait for the corssover in the other direction after your position turns, or do you use stops to close them and wait for the next crossover? If your using stops, how does this work with an automated system? Waiting on the crossover after your position turns in the oposite can sure cause you to lose a lot of your profit. On the other hand, you can also lose a lot of potential profit if you close the position too early. How do you guys deal with this.

Thanks
There are several options you have:

1) Some brokers supply an automated trading interface directly into their station (like TradeStation)

2) Some brokers supply an API for their feed and trading (MBT, IB, Oanda and GAIN). Some of those are free, and some of those are not.

If you go with a broker from option 2, you have a few options depending on how much work you want to do.

If you are or have access to a software developer, you can build your entire system around an API. For the quick and dirty, this could be the fastest way. It can also be the most customized way.

If you don't, then you can use a 3rd party trading application (NinjaTrader, Wealth-Lab, Trade-Bullet and a few others out there). These are programs that other people have written that take in feeds (sometimes you have to build an interface for the feed) and allow you to program trading rules against those feeds. This can be extremely easy if the feed interface is already in place (with wealth-lab, you can drag and drop your criteria). Don't get me wrong, you still have to learn the usage of the platform, but it can be extremely easy once you know how to do this.

Hope this helps.

One more thing...automated trading is sorta like the holy grail search. I'm sure it exists somewhere out there, but on the retail level, without adequate capitalization, this can be very difficult. I definitely recommend finding a way to test your account parameters against the market for a period of time (either in a demo account or a low cost with micro-minis if you can trade them). You will find that real-world execution can sometimes be very trying. Computers are extremely accurate at following your rules...the problem is, they're YOUR rules...which makes them prone to error. What works in one market will not work in another, so you have to be extremely aware of what type of market you're in because it can change from hour to hour with automated trading.

There was a dude here that made such an excellent point with a chart thread he was trying to do. He was trying to put down his trading methodology down on paper and realized that it was much more difficult than he thought because so much of his system was internalized (if MA is this, but the slope "looks" like this, then do this at this particular time if there is a full-moon and I saw a black cat 8 days before someone's birthday that I know...etc). I believe he was trading with some success, but trying to put his trading methodology down on paper was nearly impossible...and unfortunately, with automated trading, you have to AT LEAST be able to do that...so rule of thumb...if you can't put it down on paper, your system will inevitably be flawed. 2 cents.
0 traders viewing now