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  • #14,721
  • Nov 16, 2015 8:20am Nov 16, 2015 8:20am
Quoting spyderman
{quote} Not to beat a dying horse but...the math isn't adding upd
I have written everything in a rush this morning. Maybe I made some mistake or didn't double up lot sizes. I will take a look at it later tonight but I am pretty sure that these 2 things do even out.
  • #14,722
  • Nov 16, 2015 1:40pm Nov 16, 2015 1:40pm
Hello guys!

I just read the past posts from the last years just to catch up ... and what can I say.... beautiful results!
Tony,SaiLyfee,keep doing what you're doing!

For this week as I understand FOMC Wednesday is the only news worth trading. I might brush up some dust from my fx account and jump in into this one.
  • #14,723
  • Nov 16, 2015 5:02pm Nov 16, 2015 5:02pm
Quoting Robertk
{quote} Bit surprised how spread didnt kick you out of your short position instantly spyderman. I often get 10-15 pip spread spikes (only lasting for 2 to 3 secs) on news like this. And i pay commision also...

Yeah mine never got above 1.6 that I noticed.

Update to the long position. It finally closed at the take profit. Of course I wouldn't credit that to the news impact, probably just market direction.
I'll have to repeat the experiment on the some higher impact news.
  • #14,724
  • Nov 16, 2015 7:00pm Nov 16, 2015 7:00pm
Quoting spyderman
{quote} Well first I would suggest getting a broker that allows you to hedge if that's what you want to do. I have 3... All the issues about spreads and widening, etc. are irrelevant to whether you have a 1 sided entry or double sided. If I have a long entry prior to news and a short, both with 18 pip s/l and spreads widen and take them out, they would do the same thing if I just had a long or a short. So if it's a spread widening issue, then it's the 18 pip s/l that's the problem, not 1 sided vs. 2 sided. On the other hand, if an 18 pip s/l is...
I would like to address the slippage + spreads issue. During high impact news releases, these 2 things happen at the same time, and they are not the same thing. Spreads widen due to liquidity issues which causes the Buy / Sell prices gap to increase. Like Oadan, typically the spread can be up to 15 pips on some currencies, and 30 - 40 pips for others. Slippages occurs when entry price - whether it is by market order or limit order, cannot be fulfilled, and you enter with a higher price for buy, or a lower price for sell.

This would be an important consideration in trading news. If you try straddle trades, i.e. you put in limit buy and limit sell and hope that prices come to you, what normally happens is that you get a much worse price that you intended. Let's say you intend to short EURUSD at 1.0700 with stop losses of 20 (in normal circumstances, you get taken out at 1.0720, and you put in a limit order at 1.0700.

Let's say news release is favourable to your trade and prices moves in the direction you want - you were right this time round. But because of the volatility, your order gets filled at 1.0660, at your 20 pip SL kicks in at 1.0680 at least in theory. Which is fine provided prices keeps moving in the direction you want.

BUT.....

Because of the volatility, prices do not move in the same directions continuously. There will be ups and downs in those critical few seconds. What might happen is that prices move back up and together with the widening spread, and your trade gets taken out at a loss. This is what normally happen in real life.

There's a good reason why Tony in page one specified only certain trades, and putting in your orders 1 min before the trade. You want to take away the uncertainty pertaining to slippage where you get a much worse price than expected and only have to contend with widening spreads. The SL was 18 intentionally, to account for potential 30 pips spread widening with a bit of room for prices retracements, and yet not give away too much to the market.

As to leaving it to chance whether you want to go long and short, I leave it to you all to ponder on that. You could try hedging so that you don't need to agonise over which direction to go. Maybe our learned friend Tony could chime in and propose some refinements.
  • #14,725
  • Nov 16, 2015 8:54pm Nov 16, 2015 8:54pm
Journeyman

You say "leaving it chance whether you want to go long or short" but the reality is we don't which direction the trade will go. Oanda spread widening is pretty predictable. 15 pips on EURUSD about 20 on GBPUSD. The unpredictable part is the whipsawing that you talk about. And unfortunately 18 pips just isn't enough to stay in a trade when the volatility increases.

From experience, the straddle play can work, but to ensure you don't get a bad entry you can enter each side of the straddle(hedge) just before the news comes out. There is no sense in trying to pick the right direction. If you're going to gamble then give yourself the best chance to play ball.
  • #14,726
  • Nov 16, 2015 9:08pm Nov 16, 2015 9:08pm
Quoting beastwork
Journeyman You say "leaving it chance whether you want to go long or short" but the reality is we don't which direction the trade will go. Oanda spread widening is pretty predictable. 15 pips on EURUSD about 20 on GBPUSD. The unpredictable part is the whipsawing that you talk about. And unfortunately 18 pips just isn't enough to stay in a trade when the volatility increases. From experience, the straddle play can work, but to ensure you don't get a bad entry you can enter each side of the straddle(hedge) just before the news comes out. There is...
I totally agree with you on hedging as a viable strategy. However I do want to caution everybody with this very real and plausible scenario.

In order to avoid getting whipsawed we probably try to set a wider stop on both sides of the trade. So when the news release, the trade which is wrong gets stopped out almost immediately, shortly followed by the one which is correct which might get kicked out due to whipsaw. So double whammy with wider stops!

I am starting to think maybe we should turn the strategy upside down, and put in our bets just after all the initial surge of volatility dies down a little... I'm not sure.... Although the thrill of epic gains is gone, but we get to keep our capital and sanity intact in exchange for more predictable and smaller gains...

Just my thinking...
  • #14,727
  • Nov 17, 2015 7:01am Nov 17, 2015 7:01am
So we have USD CPI coming up in about 30 minutes.
I think I'll try another test trade. Usd/Chf has moved a little in the past on this news so I'll try that...
  • #14,728
  • Nov 17, 2015 7:41am Nov 17, 2015 7:41am
Quoting spyderman
So we have USD CPI coming up in about 30 minutes. I think I'll try another test trade. Usd/Chf has moved a little in the past on this news so I'll try that...

Well I can of messed up that one. My terminal froze up for a minute. I was trying to watch the spread as it was happening.
Anyways. Here's the chart 2 minutes before news. Spread sitting at 1.2 which is up from a low of 0.9 a couple minutes prior.

Attached Image (click to enlarge)
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Here it is right after the trade was taken with 1 minute until news.
The spread widened after I entered but before news. This was where my terminal froze.
The spread took out my short s/l but I don't know how far it widened because of the freeze. Only good news there was that it was in the direction of the spike.

Attached Image (click to enlarge)
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1 minute after news. Terminal back.
Spike on news even though it came out as projected.
I went ahead and closed for a BE as it stalled.

Attached Image (click to enlarge)
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Take away for me on this one. Usd/Chf spread widened. Next time I need to have that and Eur/Usd open at same time to see if they both widen the same.
Tony original said some where to only take buys. That way the widening spread won't hurt you if you get in before. Something to be said for that even though that's not the system anymore. So maybe take a long on Usd/Chf and a long on Eur/Usd or whatever depending on the news.
  • #14,729
  • Nov 17, 2015 8:11am Nov 17, 2015 8:11am
I shorted GBPUSD @ 1.5209 and it has not gone very well at all for me, I am sitting on a puny 1. something pip gain which threaten to go into red territory anytime soon. My whole day has been like this, my earlier trades on EURUSD was not moving enough to meet my profit expectation, overall ended up in red.

I think the market is waiting for more and better signs from US that rate hike is a certainty, and possibly at the same time it's year end holiday seasons, I don't know.
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  • #14,730
  • Nov 19, 2015 6:49am Nov 19, 2015 6:49am
Hopefully that CPI's gonna reverse us back to 1.3370 and pop that resistance line.
Invest in alarm clocks
  • #14,731
  • Nov 19, 2015 6:57am Nov 19, 2015 6:57am
Unployement claims coming in, worth trading, what do you guys think?
You'll always miss 100% of the shots you don't take.
  • #14,732
  • Nov 19, 2015 7:18am Nov 19, 2015 7:18am
Quoting Edorenta
Unployement claims coming in, worth trading, what do you guys think?
YesnoYesno....
Only the price on the chart can show the entrance to the deal...
  • #14,733
  • Nov 19, 2015 7:58am Nov 19, 2015 7:58am
I did another quick test on the unemployment/phily news. Not much to report.

I bought Eur/Usd and Usd/Chf. Spreads widened to about 2.5 pips max after news but I got in before at about a pip with no slippage.
Not much movement on news so I closed both with a pip or 2 profit.
  • #14,734
  • Nov 19, 2015 3:55pm Nov 19, 2015 3:55pm
Quoting spyderman
much movement on news so I closed both with a pip or 2 profit.
Yeah, odd that the news just reversed the trend and half an hour later EU hiked 40 pips in few minutes
Attached Image (click to enlarge)
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You'll always miss 100% of the shots you don't take.
  • #14,735
  • Nov 20, 2015 2:56am Nov 20, 2015 2:56am
European open 4 pip spike 5 sec chart - did you get it Tony ?
CAD CPI next on the agenda lol
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  • #14,736
  • Nov 27, 2015 5:17am Nov 27, 2015 5:17am
Quoting NikolasII
Hello guys! I just read the past posts from the last years just to catch up ... and what can I say.... beautiful results! Tony,SaiLyfee,keep doing what you're doing! For this week as I understand FOMC Wednesday is the only news worth trading. I might brush up some dust from my fx account and jump in into this one.

Good to see ya around again mate, best of luck to everybody this December.
  • #14,737
  • Nov 28, 2015 10:20pm Nov 28, 2015 10:20pm
hey guys what will happened to canadian news on thursday ? any ideas
  • #14,738
  • Dec 3, 2015 10:33pm Dec 3, 2015 10:33pm
[цитата = newbie2014; 8614918] Эй, ребята, что будет случилось с канадским новостей на четверг? любые идеи [/ цитата]

........
Attached Image (click to enlarge)
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Only the price on the chart can show the entrance to the deal...
  • #14,739
  • Dec 3, 2015 11:39pm Dec 3, 2015 11:39pm
Quoting vvFish
[цитата = newbie2014; 8614918] Эй, ребята, что будет случилось с канадским новостей на четверг? любые идеи [/ цитата]...
Well done vvFish, as always. toppo
  • #14,740
  • Dec 4, 2015 7:20am Dec 4, 2015 7:20am
10 min to go, I'll try an USD/CAD long. Good luck to us!
There are many wise people, but only a few of them are rich.
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