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News Trading Reversals

  • #1
  • First Post: Aug 26, 2006 7:56pm Aug 26, 2006 7:56pm
I have read a bit about playing the news after a big release with a box play.

What i am intrested in anyone discussing is playing the drawback of a big spike for a news release.
It seems to me that tons of people straddel the price and when they get slipped or even if they dont everyone is dying to get out of the trade.

So at what point do you realize that the price has stopped and will turn around?

And does anyone do this profitablly?
  • #2
  • Aug 26, 2006 8:44pm Aug 26, 2006 8:44pm
Quoting coon_70
I have read a bit about playing the news after a big release with a box play.

What i am intrested in anyone discussing is playing the drawback of a big spike for a news release.
It seems to me that tons of people straddel the price and when they get slipped or even if they dont everyone is dying to get out of the trade.

So at what point do you realize that the price has stopped and will turn around?

And does anyone do this profitablly?
I know this doesnt offer any help at all. I have actually never even tried to trade retracements. Though when cases like this are most likely to happen is when the market seems to react to strong to a news release.

An example would be only a minor deviation in numbers and the market moves 40 pips. By researching history of trades you would probably be able to tell what a move is actually capable of and expected to do. If it exceeds this move and a "reversal" trend begins... it would likely be fairly safe to trade and attempt to pick up some pips.

I actually just began to log retracement results as part of my news trading log. This after seeing dozens of reports that make up the entire initial move within a five - ten minute period.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #3
  • Aug 26, 2006 9:17pm Aug 26, 2006 9:17pm
news fading is my favorite!

see this thread...http://www.forexfactory.com/forexfor...ead.php?t=7189

if the price spikes up on news, but after 10 minutes starts to retrace, just picture all the traders who went long (the ones who created the spike). their faces are flush with dispair! they must sell! and at any price, just get me the hell out of this trade!!! and thus the sell panic starts, and the retrace moves past the pre-news price. THIS is the news fade trade
Relax and be happy.
  • #4
  • Aug 26, 2006 10:38pm Aug 26, 2006 10:38pm
Quoting merlin
news fading is my favorite!

see this thread...http://www.forexfactory.com/forexfor...ead.php?t=7189

if the price spikes up on news, but after 10 minutes starts to retrace, just picture all the traders who went long (the ones who created the spike). their faces are flush with dispair! they must sell! and at any price, just get me the hell out of this trade!!! and thus the sell panic starts, and the retrace moves past the pre-news price. THIS is the news fade trade
Cool thing Merlin,

I know that people do take advantage of this... I am so high on getting in and out so quickly I dont pay much attention to "fade". Usually I have to get up and walk my trades off or I lose my mind (win or lose).
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #5
  • Aug 27, 2006 7:32am Aug 27, 2006 7:32am
It is my humble opinion that compression is the single most important factor in determining direction for any trade. Violent reversals are excellent examples of this (*see attached account statement hahaha). You must understand the physics at work in order to erm, capitalise on said situations. You and me LOL
change the future, not the past
  • #6
  • Aug 29, 2006 10:28am Aug 29, 2006 10:28am
From Closed Thread

Quoting PTOURNIS
I was wondering how everyone puts on a trade for fading news annoucements.

When do you enter or exit?

What is your SL or TP?

This seems like a better method than trading the initial spike.
My question to you would be... "Are you Trading the Initial Reaction?"

Because if you are not and it is due to a lack of understanding of the Release, how could you possibly expect to understand how to Fade it?

No offence but learning to swim is probably a good idea before you go scuba diving with the sharks.
  • #7
  • Last Post: Aug 29, 2006 10:30am Aug 29, 2006 10:30am
LOL good point bemac!!!
Relax and be happy.
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