Anyone trade purely based on news only ?

[Anonymous]

It's interesting how traders could have such long minute by minute discussions at the same time as while they are trading the markets.

As one reads the news and argues about the news as one trades the market?

 

[JP1966]

So are you trading actively att he mom then? I have been square for past couple of hours . But thanks for your concern.

Barcuh - I imagine your cable spread is probably less than your euro dollar one, in percentage terms.

And I never take a postion before an announcement and also wont trade a figure until I see it even if the market is moving. A few times this year (es on a NFP) the spot has followed a spoof move in the bond markets in the 30 seconds before a figure. It may mean iI sometimes miss a move but so be it.

 

[sccz97]

I certainly dont trade the midnight figures as I like to sleep! Sterling more than any other currency seems to like to move when it is in the mood. It especially likes a dump! Of course sometimes it is more reactive -at the moment, with everyone undecided on what is happening to interest rates, then every figure seems to have a bigger impact.

The other thing I have noticed recently is the impact of data has changed over the past few years. I think this is the impact of day trading from non-banks. Previously if a figure came out and you say only get a 10 pip move in the expected direction then the likeyhood was that it would reverse rapidly and go the other way. Now in the minute after a release people who have traded the figure and got it right take their profit and hence there is a retracement. There then is a second wave of tradint to take it in the direction you would have expected.

Look at the PPI this am although the same has been the case many times over the past year or so. (although until this week currencies have not responded to figures for the past two weeks for probably the first time since October 2004). Cable rallied very quickly from 1.7785 to 1.7820 and then very quickly retraced to 1.7805 as people booked profits \. The second wave of buyers then stepped in. drove it through 1.7835 and hence triggered all the stops and the momentum buyers. I believe this reaction is now fairly typical although it means you trade a figure twice now rather than once. (the only caveat is I missed the second move today!).

You're missing out on some serious moves. If you wanna make the money, you gotta be up all hours. There are some great figures to trade at night in australasia.

With respect to the changes in the moves, all moves are dependnet on the number of ppl affected by the figure. A classic is tics, a year ago when the us tb wasn't on the radar in the same way it is now, tis was a figure that did nothing to the markets and there were no more than 4 or 5 analysts providing estimates. Now, it's a more consistent market mover than non farm (on a very shrot term basis).

Wrt ppi can I just clarify that in the last 12 months, output (which is by far the more sensitive of the two figures) has not been out from the estimate by mroe than 0.5% so today's deviation of 0.6 was huge. In addition input was out the same direction. This all helps traders thnk that the last thing on the mind of BoE is another rate cut, but yes, today's move was not normal for ppi.

 

[sccz97]

The initial move? So you take position before the news? Or do you just go with the flow (and the news)? But we have seen many times that the dollar goes against the news, it can fall with a positive number and vice versa. And what do you use as stop loss?.

I take my position before the move, I won't say whether I take it after the news or not

You can almost 100% uarantee that the initla gap is always funamentally in the right direction

 

[sccz97]

OK. I wish there were better spreads for Cable.

Inerbank spread is generally 2 pips, if you're lucky enough to get access

 

[JP1966]

Agree with all that but check out CBI and the 200 pip reaction on June 29th .

What time are the Oz/Kiwi figures released, Uk time.

 

[sccz97]

Do you think small traders take positions before the news? And have you ever done that? Friday with NFP you also saw a rebound after the first move before the move continued. How many pips do you risk (stop loss)?

while I work in a hedge fund, I conside the trades I make small in fx terms. I take positions before the news all the time as i did today. Stop loss is always very tight around 8-10 pips. Altohugh tis has caused me pain before

 

[sccz97]

It's interesting how traders could have such long minute by minute discussions at the same time as while they are trading the markets.

As one reads the news and argues about the news as one trades the market?

hehe, I've wondered that too, however I'm lucky enough to work in a relxed enviroment where I can play table tennis, aracde gaems etc so long as I'm profitable. And the fact that we've developed an applicatio to trade for us makes it even easier to enjoy a massage without worrying about my pnl

 

[sccz97]

Agree with all that but check out CBI and the 200 pip reaction on June 29th .

What time are the Oz/Kiwi figures released, Uk time.

kiwi and jap ones I can handle .. usually 11.45 or 00:50 (at the moment with bst, summer is the worst )
but oz figures are the wrost in summer ... 0230!!!!!! but I'd rather miss some sleep and make a couple of thousands quid than wake up in the morningand see a huge move, I'd be kicking myself. Wil def chekc the cbi move....

 

[JP1966]

CBI isnt always such a big mover but with all the focus on consumer demand etc in the UK it has been a great figure for a while. Comes out at 11am Uk time so fills the space nicley between the UK and US time zone as well!.

 

[Hayek]

sccz97 is experienced in trading news. But the success of trading news is based on two basic physical conditions. The 1st is you have to trade with a broker/dealer that will not screw you when the market is volatile. The 2nd is you have to have a news feed which will normally cost you a lot of money to obtain figures/news as soon as possible.

Unluckily, most traders here don't have either.

 

[sccz97]

CBI isnt always such a big mover but with all the focus on consumer demand etc in the UK it has been a great figure for a while. Comes out at 11am Uk time so fills the space nicley between the UK and US time zone as well!.

if there wasn't an initla gap then I guess I woudln't trade it

 

[Baruch]

I take my position before the move, I won't say whether I take it after the news or not

You can almost 100% uarantee that the initla gap is always funamentally in the right direction

I can remember that we had some gaps after NFP, and the the big moves came then in the "wrong" direction.

 

[Baruch]

Inerbank spread is generally 2 pips, if you're lucky enough to get access

I am not. I pay 4-5 pips. Have you got access to those wonderful 2 pips spreads?

 

[sccz97]

sccz97 is experienced in trading news. But the success of trading news is based on two basic physical conditions. The 1st is you have to trade with a broker/dealer that will not screw you when the market is volatile. The 2nd is you have to have a news feed which will normally cost you a lot of money to obtain figures/news as soon as possible.

Unluckily, most traders here don't have either.

tbh .. I've never tried any of the other news providers like market news, or dj (i hear they're pretty slow) but consiering the amount of money that can be made from trading figures, bloomberg and reuters at around 1k a month is next to nothing. I don't care to say what my pnl was 10 seconds after the figure today but it was more thna enough to get bloomberg for the 2yr contract they require. But yes, hayek is 100% spot on ... don't even bother trying this unless you got a decent (read honest) broker. If any of you want to attempt going down this difficult but highly rewarding path, I recomment you go with a dealer like hotspot. ****e interface, but they won't screw you

 

[Baruch]

while I work in a hedge fund, I conside the trades I make small in fx terms. I take positions before the news all the time as i did today. Stop loss is always very tight around 8-10 pips. Altohugh tis has caused me pain before

So you were long before the news today? What made you take that position? 8-10 pips? That's not much when the market really moves...
Do you ever use limit order to catch the news trades?

 

[Baruch]

CBI isnt always such a big mover but with all the focus on consumer demand etc in the UK it has been a great figure for a while. Comes out at 11am Uk time so fills the space nicley between the UK and US time zone as well!.

CBI??What's that?

 

[sccz97]

I am not. I pay 4-5 pips. Have you got access to those wonderful 2 pips spreads?

I don't think any retail dealer will give you the 2 pips without paying extra for true interbank access. Dukascopy will provide you with that but they charge commsion bring it up to 2.8 pips.

 

[JP1966]

if there wasn't an initla gap then I guess I woudln't trade it

It did gap - 1.8140 just b4 the release - price within about 30 seconds was 1.8115 offered and then kept going all day until a low of 1.7996.

Agree re news feeds. Used to have DJ but it was too slow. Have bloomberg, reuters 3000 extra and market news. Market news is the cheapest of the three but it can get great exlusives from Euro central bankers that arent picked up by Reuters or Bloomberg for a few minutes.

 

[sccz97]

So you were long before the news today? What made you take that position? 8-10 pips? That's not much when the market really moves...
Do you ever use limit order to catch the news trades?

I wasn't long before the figure was released, just long before the market moved. THe tight stop is there because I know which direction the market will gap and it's just there as a failsafe in case the extraordinary happens and the market goes the other way. I used to put on x trades each with differnet limits so I could make sure I banked enough just in case the market reversed, but I think I can read the post-figure market well enough now to know when to close out, hold or hedge