News trading discussion - continuation

1. Set up single click execution on your broker platform, and if possible, pre-determine default stop/loss and default take/profit to 15 pips, so that when you click to execute your order, your platform will automatically set your stop/loss and take/profit at 15 pips from your entry price. Do not try this with brokers that dont offer single click execution.
   
   If your platform does not allow to pre-determine default stop/loss and take/profit, then after entering the trade, simply set the stop/loss and take/profit points manually.
2. Pull up either tick, 1-second, 3-second, or 5-second chart, and at 08:29:45am, so 15 seconds before the announcement, start paying very close attention to the price action of USDJPY on your chart.
3. If between 08:30:00am and 08:30:30am, so during the first 30 seconds after the report, you see USDJPY move up or down by 25 pips or more, then enter in the direction of the initial spike at the very first 30% retracement if it occurs in 90 seconds from release time (till 08:31:30am) and if spread at the time of your entry is at 3 pips or less. Set stop/loss at 15 pips, and set take/profit at 15 pips.
   
   The retracement will happen within seconds. Dont draw anything on your chart, and dont try to get a perfect entry. As soon as you see approximately 30% retracement on your chart, compared to the initial spike, click to enter without any hesitation.
   
   If the move either up or down was less than 25 pips during the first 30 seconds, then the actual number of the report did not generate sufficient interest in the market, and you simply skip the trade. If your spread at the time of desired entry is more than 3 pips, then skip the trade.
4. If by 08:45:00am, so 15 minutes after the report release, neither your stop/loss nor your take/profit points were hit, then close the trade automatically at market price of the time.

Previous Example: on December 7 2012, at 8:30am, USA Nonfarm Payroll number was released, so in the first 12 seconds, the price of USDJPY spiked up by 45.2 pips from 82.321 to 82.773. Then price started retracing, and within about 60 seconds retraced to 30% level of 82.637. So you would Buy at 82.637, set a stop/loss at 82.487, and set a take/profit at 82.787. 3 minutes after the report the take/profit was hit yielding 12.0 pips of profit, given that your spread at the time of the entry was at exactly 3 pips.


Be patient, and do at least 20 "second wave" trades, before getting frustrated and quitting.

Once you become good at it, you will be able to win on average 7 to 8 out of 10 trades.

Keep win to loss ratio at 1:1. Tweak it only after you are consistently profitable with 1:1.

Remember, it does not matter whether you make or lose 10 pips or 100 pips on a trade. What matters is how much money you make or lose on a trade. When risking 10 pips, simply put up 10 times more lots than you would when you risk 100 pips, and at the end you will make or lose the same amount of money. Yes, spread to pips targeted ratio matters, but these news "second wave" moves have such high probability of success that they somehow make up for the very high spread to pips targeted ratio (2 to 10), which is a small miracle in itself.