Help With News Trading

Hi, i'm looking for a good reliable broker for news trading. I always straddle the news so oanda's not going to work for me, although i've heard that it's a very stable during news times.

I'm currently using Fxsol, and so far it's been ok for news. The executions are not instant but still acceptablte The only problem with them is that recently they put a limit on how close you can place your long and short order just before the news. So if the current price is 1.2700, i can only put long and short order at 1.2725 and 1.2675. Which cause the straddle to fall appart since by the time my trigger is hit, it's probably already at the peak of the news spike.

Now, i'm not looking for a broker with a really right spread, or a good charting software. Just looking for a broker where i can place this straddle without any problem.

Any advice is welcomed

Thanks

yes you can place stradle orders with Oanda... you use limit orders.
you can not hedge on the same account with Oanda.
if you want to hedge you have to open a sub account....which is easy to do, takes about 5 minutes.

the problem is that they increase the spread during news. usually i trade news that i think could move the market 20-30 pips. So with straddle placed +-10 pips away, my profit is usually in the range of 10-20 pips. With oanda if they increase the spread to 10-15pips during news, then my profit would drop to about 10 pips only. And i think it's not worth the risk.

You must use an ECN-like broker, like MBTrader, IB, HotspotFX, ...

They have not fixed spreads, won't trade against you by taking the opposite side, and you can place your order even inside the bid-ask spread.

Basically do not use any "broker" with "no comissions" ;-)

Oanda's real recent spreads

http://fxtrade.oanda.com/spreads/recent_spreads.shtml

5 pips on eurusd is high, usual has been 3.5 pips even on NFP or other major news.

Do they tell you in advance if they're going to increase the spread? If not, how long before the actual news do they increase the spread?

I'm not coming to the defense of ECNS or brokers, but being on the actual floor or pit in a derivatives market, the actual pit trader can be off by a significant price differential from the pit trader next to them, within a few seconds the price differential can be immense. But most pit traders jump out quickly sustaining a relative small loss to what it could be during a significant news event.

So the huge differentials and swings you see on your trading platform reflects what is actively being quoted in the interbank market.

So lets say I sell 10 lots of USD/JPY at 115.8 during a news event. The broker immediately is holding those lots has to scalp out of them at the bid, sell them to another retail customer or offset that position in the interbank market. The dilemma comes to them, is when a huge order hits them and the market quickly moves away from them, and even offsetting their position in the interbank market, they end up loosing a significant amount during the offset process during a news event.

So some bucket shops, might cancel a unfavorable order in which their position has moved away against them, or fill your order at a artificial price more favorable to their offset position, sticking it to the retail customer.

All it takes is a retail customer with friends in the justice department to make a phone call. To have the FBI raid their offices and confiscate orders and computers to decipher fradulant practices. You will see it happen soon enough. After the Refco fiasco, I would presume some of these brokers are already being monitored.

Spectre, will trading standard lots instead of mini lots help get your order filled or closed during news? even at the same broker?

the smaller the lot the easier it is for the broker to give you the price you want, since taking the opposing position the risk is less for him. And it is known that taking the opposing position on small lots from retail investors on the whole becomes profitable, since most retail customers end up getting taken out of the game.

Its similar to the odd lot indicator in equity trading.

There's no advance warning you're supposed to watch your news calendar and expect it to happen. It only happens on major news as you can tell from the spread history, mostly the 8.30 am releases. If you're sensitive to the spread use the minmax rate display or keep bid and ask price lines visible.

The spreads rise only at the last minute or so, and go down pretty soon too as liquidity comes back to the market. I don't worry about them because I've learned that at Oanda increased spread means increased profit potential. I let my trades develop and oftentimes close at normal spreads because I'm patient enough to wait for the full move to happen.

Just think it through, normal spread is 1.5 pips but there's quick profit potential for perhaps 10-15 pips and that's it. At news time spread is 3.5 but there's 30-50-80-130 pips profit potential. Even 200 rarely every now and then. Only a fool would forego such opportunity because of the 'high' spread. Penny wise pound foolish.