How to trade NFP/FOMC and make pips

Common question to ponder : How to trade NFP & FOMC High Impact News for USD

Generally during NFP & FOMC Events , XXX USD & USD XXX pairs starts trending up/down crazily for huge amount of PIPS depending on NFP(Non Form Payroll) US Employment data (or) for FOMC: Fed Dovish /Hawkish stance on US Economy + QE Taper/More QE (QE1,QE2 & QE3) + USD Rates Increase etc..

To start with there are 3 options at disposal for us :

 

1. Shut your PC, am not gonna trade and outguess these data ==>(stay away from this high impact news NFP/FOMC )
2. Use Commercial news trading software like :
   1. Oracle Trader
   2. NFP Pilot

3. Use a very simple strategy which I have used time and again proven to be successful (read below)

Simple Strategy :

As a trader we are aware let it be NFP (or) FOMC news , the impact it creates on USD is phenomenal ,So how we do get our share of PIPS by trading it smartly??

I have tried this approach many number of times , as there is not much risk involved and have grabbed decent amount of PIPS every time depending on the nature of move we have based on this news.

Before the event, say 7min ago : Take in all 6 trades in SAME Direction /SAME Volume & keep the pending orders 2x times the initial volume at 30 pip distance

For Example :

Entry :

3pairs from XXX USD Universe :

Buy 0.1 EUR USD 1.3411
BUY 0.1 GBP USD 1.6952
BUY 0.1 AUD USD 0.9391

3pairs from USD XXX Universe :

BUY 0.1 USD JPY 102.08

BUY 0.1 USD CAD 1.0852

BUY 0.1 USD CHF 0.9117

set 6 pending orders 30pips distance 2x times the above ones i.e :

SELL 0.2 EUR USD 1.3381
SELL 0.2 GBP USD 1.6922
SELL 0.2 AUD USD 0.9361
SELL 0.2 USD JPY 101.78
SELL 0.2 USD CAD 1.0822
SELL 0.2 USD CHF 0.9087

Exit :

I generally close all the trades at one go after the pending trades for min 3 pairs gets activated out of 6 and have decent $$ profit to take home


Why this strategy works and good to make an EA to test out too :

NFP/FOMC events generally have a theme to make USD strong /weak, that creates trending opportunities if assume the data created USD positive sentiment:

out of our 6 trades USD XXX Universe group (3 pairs) will do well and we have to worry about the XXX USD Universe . Pending sell orders for XXX USD pairs Universe will get activated to limit any damage and make profits on downside + plus we have 3 USD XXX pairs doing well + voila we have limited damage on XXX USD pairs there you go we make some amount of profits depending on the move.


To automate this strategy for EA Coders, here's my thoughts :

i) EA should place both BUY 6 pairs( 3 USD XXX & 3 XXX USD pairs) along with SELL 6 pairs ( 3 USD XXX & 3 XXX USD pairs) at the same time/volume "x" if no orders of those pairs exist

ii) pending orders for all open trades with 2x volumes awaiting at 30pips distance

iii) Basket order mechanism to poll all the open orders total profit matching the user set ProfitTarget Dollars and close them at one go.


I have used this mechanism over many Fed FOMC & NFP events and proven to be successful doing it manual, any comments/tweakings welcome.

Cheers,
Scoobi

Good pips harvested on US GDP move today with same strategy, US GDP 4% actual Vs 3% expected. USD moved up Vs Rest of the pairs and made 44pips nett closed all and waiting for FOMC .

cheers

Why not only use pending orders intead of hedge positions? What broker for strategy ? What about slippage?

Thanks Scoobi, Ill will give it a whirl.
Very neat and simple also the outline is direct and clear.. i will trade the fomc in 1 hour and report back

Just to clarify; 7 min before event enter trade xx lots for 6 pairs and place orders as above

Good point.
I would use best possible broker, such as pepperstone, there are a few with very low spreads i can post others if you want

About the recent event NFP today, scoobi you said you were long EURUSD at 1.3411 so it went south and then your in a short at 1.3381, doing the calcs you wouldnt have been in a positive number for that pair, i imagine others performed better so overall you were up and at that point you close them all

Scoobi where are you.. 80 traders viewing!! just want some clarity before entering on fomc, thanks

Verve,

Please let me know what doubts you have?

Thanks,

Scoobi

Interesting idea.... will give it a whirl... thanks for sharing...

thanks!

Do u enter all 6 pairs 7 min before news and place orders, silly question but just want to confirm this.. then i exit ??

see pic and pls let me know, thank you

Edit: Changed image, i placed 3 buys and 3 sells, was supposed to be 6 buys, and 6 sell orders

did it work?

Break even basically, winning with audusd so up a few pips overall... ill await scoobi to place some posts and images

Verve you are right, however you kept 3x times sell orders which is more adventurous not required

Is there a chatroom inside ForexFactory to facilitate us chat?, I can explain in detail.

Earlier in the day GDP data Outsmarted the expectations 4% US GDP Vs 3% and USD Emerged Stronger to make us pips through USD XXX pairs!

For FOMC Fed issued the following statement which assured to tapper 10billion usd however raised few growth concerns & US Federal Reserve cuts QE purchases as expected and lackluster statement leaves Dollar mostly unchanged, yields pulling back modestly.


This made players to book profits in USD XXX pairs long and XXX USD pairs, creating fall in UJ,UCAD,UCHF and raise in EU,GU,AU temporarily made total +ve pips with UJ and UCAD hedged for me.

Guys who are risk averse, please keep pending orders at 25pips instead of 30pips. Keeping it further closer will whipsaw both sides which is unwarranted.

Folks attached the above position management EA , it won't trade its just for convenient open order closure usage.

Please attach the EA to any chart, when you have placed the initial 6 orders and pending orders.

Based on your risk appetite and market sense set desired profit target using the following parameter as inputs :


extern int ProfitTarget=10; // ==> implies 10usd target


If you give input as 10 USD, then all the open positions including hedged orders + pending orders will be closed upon your account profit reaching 10 usd.

Hope it helps.

Regards,
Scoobi

Got ya, 3x is not correct.
FF does not have a chat feature. We communicate with sign language
Lets see how the next event occurs, the fomc was dull.

Im not completely clear on exit strategy. So i was in a market buy for all 6 pairs, USDCAD neared sell order but by this point i closed all trades.
Ill see your posts and images in the future. this is not exactly going to be a rambunctious thread with so few events, which is fine by me, ill use this strategy in my retirement

I think, the result depends very much on what pairs go to your direction and what pairs go against. We have to remember that the volatility and pip value of different pairs is different.

Verve closing all the trades is left to once appetite for certain profit , you closed it since you made net +ve pips with upmove in AU,GU,EU with UJ/UCAD and UCHF dragging. I will start capturing screenshots of trades from next NFP or FOMC with clear entry and exits I did. Other traders also can post the same.

This FOMC Statement was more lame didn't create much trend, some times if you see data mentioned as "FOMC Conference/Minutes" in FF Calender
Fed Chair Yellen has live questionnaire session that gets interesting and moves market a lot however this was just plain text statement for us to read and make out what we like