How to improve news trading strategy

Hi, newbie here. I started learning fx trading few months ago, and burnt my $1000 account. I was with fxpro which only allow 0.1 minimum, and switched to axitrader now on my second $1000 account which allow smaller 0.01 lot minimum.

I've read few strategies in here and I noticed many ppl recommended daily chart trading with no more than 0.05 open at any single time, so I'm trying this strategy for now. A month in progress my current equity is at $1100.

Aside from this I've also been trying news trading. I noticed many USD news announcement (red item on calendar) like unemployment rate, PMI etc often causes price spike like this:



That gives me idea where if announcement comes at 15.30, we wait until 15.30 15m bar opens, guess the direction by looking at 80-100pt short spike, and place 1 lot trade in that direction with the hope it will continue 600-700pt. I also placed stop loss immediately to limit risk.

I also checked previous 4-5 same announcement to get the idea about how much spike and whipsaw might happen.

So far I've tried this 4-5 times with mixed result, there's one success where I made $530 gain, but the others failed either due to premature stops or whipsaws.

I often struggle trying to figure out where should I place my stops.

Has anyone succeeded applying this technique for a long term? What can I do to improve this strategy, or should I just forget about it completely ?

Be careful with news-trading, because whipsaws and slippages can cause you big losses, as you already experienced. Even if you have stop-loss set, there is no guarantee that the position will close on that level. Many times you could face 2 or 3 times bigger loss, than your stop-loss distance.

Record news with video capture from screen so that you can replay that fast movement later.

Save tick data for review.

Consider making EA to improve timing.

I don't trade news, but I have mentioned common theme: news have potention to turn market around... so.. you should look in which direction it has more potential.

NFP 2013.08.02 USDJPY, Price was "High", bad news resulted in turnaround.
ISM Non-Manufacturing PMI 2013.08.05 USDJPY price was ''High'', news were better than expected. Market immediately rallied 20 pips then went down 3000.
Unemployment claims on 2013.08.08. USDJPY price was ''High'' (Trend was down, it was in pullback mode). Numbers were as expected (made whipsaw to upside), trend continued and made another low.

etc.

Thanks guys for the recommendations. I tried another news trade last night for USD Non-farm Employment Chg and Unemployment Rate and again premature stops got me.

I entered at the first bar in the blue region (time = 15:30), 1 lot long pos at 1.31268 (red line). When price reaches upper part of the 1st bar I set my SL to 1.31268 to 0 my risk but the 2nd bar got me.

Subsequent bars has proven I should've set my SL lower and let it go few more bars, and I could take at least 400pt



I think I need to either set tighter TP or widen my SL to let go few more bars.

I'm also installing Adobe Captivate to capture the video, thanks for the tips. Aiming for AUD unemployment rate announcement next week 12 Sep at 01:30 GMT.

Get rid of that 15 min chart when you are looking for entry (stops) for news trades. News make price move fast and on this chart you basically see nothing.

Here is a 1 min chart. You had a very nice entry.

That breakout to the downside was weak, price was exhausted. You should make sure that you set your stop loss so that you think it won't be a good buy/sell anymore after price hits your stop loss. It seems like you changed your stops loss for emotional relief (no loss) rather than logical reasons.

Rob's Trading Ideas Before The Presidents Speech On Syria And Contract Rollover
http://forexscalping101.blogspot.com...residents.html

Live Price Acton Trading - 'Fakey Strategy' by Nial Fuller (Non Farm Payroll )
http://forexscalping101.blogspot.com...-strategy.html

Thanks all for the replies. I used 1m chart now. Just managed to profit 292pt from AUD unemployment announcement (0430 GMT+3).



I entered short at 0430 bar at 0.93301 (A) and closed at 0431 bar at 0.93009 (B). Maybe I should have waited some resistance to form (yellow circle) and gain 200pt more but I'm still practising to fight against nervousness and impatience

Aiming for USD Unemployment Claims at 1530 (GMT+3) next later today

USD unemployment claim data last night was very hard to trade. Lost 160pt. Entered at 15.30bar at 1.32686 (A), 1st bar show a swing downward but it never materialize. The opposite swing got me at 16.08 at 1.32846 (B)

Going against the grain a smidge here, but in my 10+ years of trading, what I have noticed is that news trading is utterly futile. Most often, the market (in terms of price) is already portending the move before the news happens or has already incorporated the news beforehand. News is an afterthought and a thrust. 9 times out of 10, the move is precipitated by typical market action, even if by only a few hours.

Hi, look at GBP chart during news it gives the spike towards short or long straight not like EURUSD during mixed data eurusd realy disturb therefore I decided to take GBPUSD and AUDUSD for news trading , before GBP news one minute earlier I took 15 to 20 PIPS distance from current market price with only 10 PIPS TP and SL TO 10 LOT SIZE 0.05 OR 0.10 for BUYSTOP and SELL STOP it works so far, I m using stop hunter EA for news trading which took pending orders before news one minute earlier but people can take manual buy stop or sell stop orders . I recommend both pending orders simultaneously try it on demo.

Think you are right on the idea for news trading. What essentially your strategy is looking for a retracement from the initial spike, to a tleast hit the post-news low. However, unless the news is an outlier, the price reverts to the pre-news price. I think the news candle has to be a certain size (30pips+), before the price doesnt retrace to pre-news.

I think as well your entries are a bit early. You should have got mid 1.3270s yesterday on the bounce before going short.

Make sure you get an EA to set a straddle trade of pending orders with stop loss set. I used to trade manually and got caught when there was a huge whipsaw that was emptying my account so fast i could not set a stop loss and every time I tried to close the order a message came up for a re-quote... this kept happening .. I could not close the order and was margin called.

Hello everybody, can i know what is EA?

I am trying news trading too, but my money is keep on decreasing. Some time the news is not accurate, some time the news were too late and i only able to catch small portion of the profit.

To avoid surprises and even failures in their operations in the Forex market, it is vital that the operator is aware and which are master schedules and sessions to operate the Forex.

The key principle of my Price Action Strategy is to keep things simple. I am against over complicating trading. In my opinion, the simpler your method is, the more effective you will be.
With my Price Action trading strategy I aim to keep my charts as clean as possible.

This could be useful for News Traders: Webinar with Walter Peters and Roberto

130 Pips on the News Release. One hour scalp system.
http://forexscalping101.blogspot.com...s-release.html

One more related video link:
Roberto Santori trades the Non-Farm Payroll with a naked forex trading system.
http://forexscalping101.blogspot.com...ll-system.html

I have been experimenting with different trading strategies for a couple of years, and since I retired and have more time I am experimenting with trading the news. I am a psychologist and put a lot of faith in what the medical profession calls 'evidence-based practice'. In other words, if a system works then show me the evidence. I therefore have a suggestion to make in order to answer the question 'does news trading work'? Show me the evidence in actual trades taken and presented for analysis. I have set up a demo account explorer which allows anyone to see my experimental trades, and I am happy to discuss news trading techniques that are grounded in evidence that can be seen, rather than discussing the theories and past failures. Is there anyone else out there who trades the news who is willing to share their explorer results for discussion with a view to improving our profitability?

If you are using a demo account to test trading the news with straddle trading, then forget it. You will make a profit on the demo, but not live, because of the huge spreads at news time. If you really want to test news trading you need to open a live mini account and trade in cents, only then can you get an accurate result of trading the news.

I have attached my sept statement doing just this. As you can see it made a profit.

I acknowledge the truth of what you say William (EventHorizon). When I place a trade on the demo account I place the same trade on my live account. The reason I have a live and a demo is that I can't show my live account on Forex Factory's explorer. By using both I am fully conversant with the differences between live and demo trading, and live trading generally (but not always) provides lower profitability than demo trading. Using a demo and live account in tandem gives me practical experience of the disadvantages of straddle trading the news, slippage and wide spreads. I am therefore testing the 'pre-news sentiment' strategy at the same time as testing Henry Lui's CNT EA.