trading news

[mpat89]

I was watching the GBP/USD earlier as I wanted to see what effect the news at 9.30am would have on the price. I saw the market was trading within a range and had thoughts that entry orders either side of this range to catch news movement could have been profitable. I was just wondering if I haven't caught the wrong end of the stick here - is it normal for people to trade news like this? I had an order to go short below the range with 20 pip stop and 21 pip limit but cancelled it just before the news thinking I'd watch it manually, missed the screen completely from a phone call. I was just wondering if this is something I can look to trade in the future or something that people generally steer well clear of?

Thank you!

 

[tomorton]

Some people call this a bracket trade. It ought to catch a meaningful move in a new direction away from the mean, and this could be triggered by a news announcement, especially stuff like interest rates, unemployment, US NFPR, etc. A drawback is that if your limit orders are too tight, an initial move can get you in just prior to a reversal which sails thought the opposite limit order, which has now been cancelled by the first triggerng.

I think a look at Phil Newton's thread on break-outs on this site, also on YouTube, will be interesting.