News Straddles

BryanMacBryanMac Posts: 851 ✭✭✭
As I mentioned I love to trade news, I will get into more detail as I post more. I do use an Expert Adviser to trade news, i used to trade it manually, but have been using an EA for about 2 1/2 months now.

FOMC this one went perfect pulled 23 pips.

Bryan Mcafee
Hit me up on skype at Brymcafee (McAllen TX)
www.tradingaxis.com

Comments

  • BryanMacBryanMac Posts: 851 ✭✭✭
    I cheated and moved TP on this one had to run to bathroom lol, I still don't trust EA 100% to just let it run so only 15 pips, goal was 20.

    Bryan Mcafee
    Hit me up on skype at Brymcafee (McAllen TX)
    www.tradingaxis.com
  • BryanMacBryanMac Posts: 851 ✭✭✭
    NFP 8/2/2013 worked perfect this time

    Bryan Mcafee
    Hit me up on skype at Brymcafee (McAllen TX)
    www.tradingaxis.com
  • BryanMacBryanMac Posts: 851 ✭✭✭
    Well its been pretty dead with news releases im on the new version of the EA so have not got to test it much.

    Once I can confirm its working as intended I will load everything up here.

    10 pips ITM here

    Bryan Mcafee
    Hit me up on skype at Brymcafee (McAllen TX)
    www.tradingaxis.com
  • mifunemifune Posts: 160 ✭✭
    Interesting. Thanks for the great series of posts!
  • BryanMacBryanMac Posts: 851 ✭✭✭
    Im still tweaking setting for the EA and then ill post the EA and the settings here.
    Bryan Mcafee
    Hit me up on skype at Brymcafee (McAllen TX)
    www.tradingaxis.com
  • BryanMacBryanMac Posts: 851 ✭✭✭
    Hey all!!

    So hopefully the videos have caught your eye.

    Next I wanted to talk about the Pros and Cons of trading News.

    Before I get going the one thing I preach with News is don't get greedy, get in get out make a few pips. Greed will cause you to lose!

    To start with i will cover the good points. News trades are fast and done and over with in 30 seconds up to 2 mins.
    If everything goes good you make a nice little chunk of pips. That pretty sums it up lol.

    The bad, if you lose you normally lose a little more than a normal scalp, as you have to have a larger stop loss when dealing with news as it tends to jump all over the place.

    Lets get into the concepts for the set up and what you need to look at and consider.

    Step one of course is the straddle. We are basically setting a trap for the price whether it moves up or down we will have a pending order to catch it. Sounds simple enough, but what happens a lot of times when news is release is what is called "whiplash" price will jump back and forth rapidly before actually heading in the direction of news.

    image

    So we need to make sure the straddle is wide enough to not get hit by price before it decides on direction.

    Worst case price will head one direction and pop a pending order then reverse and open your other pending order. In that case you need to be quick and close one. That is not normally what happens, and since I trade news very conservative has only happened once in the last 6 months.

    Part one the straddle is set so we sit back and watch news roll in. (I use a EA as you can see from the videos so my straddle is set 1 second before news hits).

    3 possible results here:

    1. News is a dud, no movement occurs. Close pending orders and no money lost.
    2. You catch a whiplash and have to close the open order, and then pray price moves enough in the other direction to cover your loss.
    3. Everything goes as planned and you are in the trade and in the green.

    For results 2 and 3 the next step is to try and lock in some profit. Hopefully its option 3.

    We lock in profit by having a break even point, and using a trailing Stop Loss.

    The break even kicks in when price has gone a set amount into profit. Basically your original stop loss is moved up to right above where you went into profit.

    As price keeps moving 2 things will happen, one your Take Profit will be hit and your trade is closed and your done, or either your Break even point will be hit and you make a marginal profit, or tour trailing stop loss is hit and to take a partial profit.

    That pretty much covers what goes on during a news trade.

    Next Ill be doing a video covering the EA I use how to set it up and ill show how to use the attached spread sheet to decide on settings.

    ***The spreadsheet attached I did not come up with I got it from Forex Factory***
    xls
    xls
    Economic Report.xls
    91K
    Bryan Mcafee
    Hit me up on skype at Brymcafee (McAllen TX)
    www.tradingaxis.com
  • BryanMacBryanMac Posts: 851 ✭✭✭
    Had 2 news trades today, 1st one i screwed up and set the straddle to small and got stopped out. 2nd one went perfect took 10 pips.



    Bryan Mcafee
    Hit me up on skype at Brymcafee (McAllen TX)
    www.tradingaxis.com
  • BryanMacBryanMac Posts: 851 ✭✭✭
    Fun week ahead (Even if you do not trade news you should take note of times so you dont get spiked out of a BIN Trade.)

    Monday Aug 26, 06:30 United States Durable Goods Orders
    Monday Aug 26, 06:30 United States Durable Goods Orders ex Transportation
    Tuesday Aug 27, 08:00 United States Consumer Confidence
    Wednesday Aug 28, 05:45 United Kingdom Mark Carney speaks at UK Parliament
    Thursday Aug 29, 01:55 Germany Unemployment Rate s.a.
    Thursday Aug 29, 01:55 Germany Unemployment Change
    Thursday Aug 29, 06:00 Germany Consumer Price Index (YoY)
    Thursday Aug 29, 06:00 Germany Harmonised Index of Consumer Prices (YoY)
    Thursday Aug 29, 06:30 United States Gross Domestic Product Annualized
    Thursday Aug 29, 06:30 United States Initial Jobless Claims High
    Thursday Aug 29, 17:30 Japan National Consumer Price Index (YoY)
    Thursday Aug 29, 17:30 Japan National CPI Ex Food, Energy (YoY)
    Thursday Aug 29, 17:45 United States Fed's Bullard speech
    Friday Aug 30, 02:00 Italy Unemployment
    Friday Aug 30, 07:55 United States Reuters/Michigan Consumer Sentiment Index
    Bryan Mcafee
    Hit me up on skype at Brymcafee (McAllen TX)
    www.tradingaxis.com
  • mifunemifune Posts: 160 ✭✭
    ^ That's always a good point to emphasize. Regardless of what you're trading it's very important to keep tabs on the news relevant to the asset being traded. The volatility spike that normally accompanies news time essentially makes a short-term binary trade a 50-50 gamble.
  • BryanMacBryanMac Posts: 851 ✭✭✭
    USD Core Durable Goods Orders (MoM)
    10 pips I forgot to switch to 1 min charts, and i had to create my .set file all over i had issues over the weekend and re-installed MT4 and lost them.
    SAD SAD DAY


    Bryan Mcafee
    Hit me up on skype at Brymcafee (McAllen TX)
    www.tradingaxis.com
  • kostaszekostasze Posts: 227 ✭✭
    edited August 2013
    I took the same trade (about 10pips gain) with you manually Bryan. Sometimes, when there are news I put 2 orders like your system, about 1 minute before the news. Some other times, like I did today I am waiting for the "news candle" to turn into a climax(heavily shorts/longs) candle to buy or sell in the direction of the news.


  • BryanMacBryanMac Posts: 851 ✭✭✭
    Hey all!!

    Today want to talk about some of the "tools" i use when News Trading. Even if you do not trade news give it a read because what im covering here today also effects your day to day trading.

    1st one that everyone should be aware of no matter what you trade is News, when its coming out, and how much of a impact it is estimated to have on the market. This can be done in 2 ways, thru the use of a indicator in MT4, or thru a web site.

    For MT4 I use a MT4 indicator called "NewsCal-v107"

    image

    image

    Nice little indi. Yellow is low impact, Orange medium, and Red High.

    Rule of thumb for me is I do not trade 10 mins before news and depending on the outcome up to 30 mins after. I will Trade the news it self, but no scalping or bin trading.

    Play around with the indi it is a great little tool will even draw vertical lines on your chart to show you when news hits. Only place it on on chart though if you trade multiple pairs. (If you have any questions on it please feel free to hit me up!)

    2nd is the web site I use. I know a lot of people use forex factory, but I find it lacking in the speed department on updating when news comes out.

    The site I use and really like as over just seems more stable and a lot faster is investing.com/economic-calendar/

    It has a very nice economic news calender and a holiday calender. And you can set up filters.

    image

    If you register it will remember your filter settings.

    To sum it up News can be your friend as long as you are aware of it, or it can ruin your trading day.

    If you have any questions or need help with the MT4 indicator please feel free to contact me.

    Have a great day all!!
    Bryan Mcafee
    Hit me up on skype at Brymcafee (McAllen TX)
    www.tradingaxis.com
  • BryanMacBryanMac Posts: 851 ✭✭✭
    So MT4 froze on me had it open 5 days and scared the #$%# out of me on this one.

    Bryan Mcafee
    Hit me up on skype at Brymcafee (McAllen TX)
    www.tradingaxis.com
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