Buy AND sell the USD...

[£10kLoser]

A couple of times a week, we get news that moves the dollar dramatically - like today's GDP and Friday's employment data. For some time now, I've opened up a buy position with one broker and a sell position with another - each with a 60 tick limit and a 25 tick stop.

The news comes out and bang, the dollar (against the EUR) generally moves at least 60 ticks one way or the other, giving me an easy 35 pips. Yes, it can happen that both stops get hit and I lose 50 pips, but, overall, it's a profit maker.

Even better, is to employ the same strategy with gold because it is less jumpy. For example, today I pocketed a $6.30 move up and was able to quickly close my sell position for a loss of under $2.00 - giving me over $4.00 profit at £50 a dollar.

Gold is so much better than Forex for this method but I thought I'd post it here since gold traders are pretty rare!

 

[Encantador]

A couple of times a week, we get news that moves the dollar dramatically - like today's GDP and Friday's employment data. For some time now, I've opened up a buy position with one broker and a sell position with another - each with a 60 tick limit and a 25 tick stop.

The news comes out and bang, the dollar (against the EUR) generally moves at least 60 ticks one way or the other, giving me an easy 35 pips. Yes, it can happen that both stops get hit and I lose 50 pips, but, overall, it's a profit maker.

Even better, is to employ the same strategy with gold because it is less jumpy. For example, today I pocketed a $6.30 move up and was able to quickly close my sell position for a loss of under $2.00 - giving me over $4.00 profit at £50 a dollar.

Gold is so much better than Forex for this method but I thought I'd post it here since gold traders are pretty rare!

Hi,
How do you decide which news events to target, or do you do this for all of them?
How close to the news event do you open the trades?

Steve

 

[£10kLoser]

Hi,
How do you decide which news events to target, or do you do this for all of them?
How close to the news event do you open the trades?

Steve

The simplest is to go to Forex Calendar @ Forex Factory and choose the ones that rate red for the USD.

 

[arabianights]

To acheieve the same result with half the transaction costs, just set a stop either side of where the market is to enter the position

 

[£10kLoser]

To acheieve the same result with half the transaction costs, just set a stop either side of where the market is to enter the position

Nice idea but it doesn't work so well because you will end up with just one position opened after a move in that direction - if it doesn't continue or it reverses you've lost money. Transaction costs are not so big anyway...

 

[stevespray]

This method works fine until your broker / spreadbet firm spots what you are doing and/or you increase your trading size to make a meaningful profit. Then you'll get slipped on your stop loss order.

Steve.

 

[£10kLoser]

Gee you guys are paranoid! Funny how brokers and/or spread bet firms get the blame for losing trades. However, I actually place a buy with one co and a sell with another, so it's impossible for them to know what's going on.

 

[stevespray]

Gee you guys are paranoid! Funny how brokers and/or spread bet firms get the blame for losing trades. However, I actually place a buy with one co and a sell with another, so it's impossible for them to know what's going on.

I disagree!

Do you not see that what you are banking on is the fact that, during a sharp sudden move, your broker will fill you at your stop level? At £1 per pip they may not worry too much and will quite often fill you at exactly the level you have requested. Move the stakes to £10 per pip and the rules change drastically. Suddenley you will find that your order wont fill instantly and will take a while to be processed. Then, if the gap (right after the data) is big you will find that your stop is not honoured as you have set it.

You say that they dont know whats going on because you use different accounts etc but this method you outline is far from new and has in fact been going on (in terms of retail fx trading) for ten years plus. You see, what shows up on your account are several things, firstly you only tend to trade in size around the times of data and, secondly, on average your account is growing as the number of trades passes. Statistically each time you trade and get away with your 'trick' you are pinching a little bit of value from the firm. They are VERY aware of this.

You'll soon find out.

Steve.

 

[darktone]

Gee you guys are paranoid!

Nope!. Been there and done the bracket thing when NFPR were gapping silly. The brokers where offering guaranteed fills to pull the punters at the time, needless to say it didnt last long! They were getting hosed down left right and centre.

 

[stevespray]

Nope!. Been there and done the bracket thing when NFPR were gapping silly. The brokers where offering guaranteed fills to pull the punters at the time, needless to say it didnt last long! They were getting hosed down left right and centre.

Yes - I think the final nail was when one US GDP number came out and moved eur/usd around 200 pips in a few seconds.

Steve.

 

[£10kLoser]

I disagree!

Do you not see that what you are banking on is the fact that, during a sharp sudden move, your broker will fill you at your stop level? At £1 per pip they may not worry too much and will quite often fill you at exactly the level you have requested. Move the stakes to £10 per pip and the rules change drastically. Suddenley you will find that your order wont fill instantly and will take a while to be processed. Then, if the gap (right after the data) is big you will find that your stop is not honoured as you have set it.

Steve.

Orders often take several minutes to be filled anyway - but, so far, always at the right level - even at £10 a pip.

Where do you get your so certain information from? Have you used all the spread bet companies and proven this to be true or are you just propagating the common myth about SB firms? Your assumption is that they try and stop anyone from making a profit, which is a common, but mistaken, belief. If they did that, they would lose business and many people make a good regular profit from spread betting.

The fact is that most people lose money fast at spread betting because they are poor traders and like to believe that they were ripped off. In most cases, they would have lost their money with a 'real' broker just as fast.

Whatever, until I start losing money through no fault of my own, I am perfectly happy with the way IG treats me.

I have had problems with CMC and closing bets manually - once they took so long it cost me £500, so I don't use them any more but with IG one click gets me the price quoted.

 

[darktone]

Whatever, until I start losing money through no fault of my own, I am perfectly happy with the way IG treats me.

Maybe you should think about the mechanics of what your doin then put yourself in the brokers (or sb) shoes. Ie if they have a rail stops at 90 and every feed they got has gapped to 30 then why would they fill there punters at 90??
Why not give them a ring and ask about there policy on filling orders in gapping markets, your likely to get a very "er, well errrmm, eh" kinda answer.
In short, if its not in bold black and white (NO SLIPPAGE ON ORDERS) then its a stick they can hit you with at any time. If you where a broker when would hit your punter? Most likely when his confidence is up, along with his size.

Now you cant say you havent been warned. . All the best with it.

 

[cryten]

You do get a hard time in here 10k, personally I enjoy reading your posts

 

[Vrothdar]

Seconded. I can see where people are coming from here but I'd say if it works for you and you're comfortable with the risks stick to it.

 

[darktone]

You do get a hard time in here 10k, personally I enjoy reading your posts

Hang on a minute. This isnt an attack of any kind.. Its a heads up!..
One thing i might add is to keep size consistant, that way youve more chance of holding onto your gains. ie you are limiting the size of the stick you can get hit with..

As i said before. gl with it mon. May you be showerd in pips.

 

[cryten]

Hang on a minute. This isnt an attack of any kind.. Its a heads up!..
One thing i might add is to keep size consistant, that way youve more chance of holding onto your gains. ie you are limiting the size of the stick you can get hit with..

As i said before. gl with it mon. May you be showerd in pips.

hehe I didn't mean you personally, 10k gets a lot of stick in t2w because he makes good money with ma cross overs and news trading with SB companies so where ever he posts he gets a bit of a hard time is all I meant.

 

[£10kLoser]

Hard Time Indeed!

You do get a hard time in here 10k, personally I enjoy reading your posts

Ha! Just seen this!

Yes, I do...

I get the impression so many people are just looking to blame brokers and particularly spread bet firms for their failing to make a profit. We all acknowledge that maybe 95% fail at trading so obviously MOST traders are going to come up with a load of cr*p. I would make that 19 out of 20, actually.

Of couse, you lot are all part of the 5%, aren't you?

Thanks for the half vote of confidence!

 

[cryten]

I think it was a full vote of confidence 10k

 

[FXSCALPER2]

Nope!. Been there and done the bracket thing when NFPR were gapping silly. The brokers where offering guaranteed fills to pull the punters at the time, needless to say it didnt last long! They were getting hosed down left right and centre.

Hilarious really. What were thinking with the guaranteed fills?

 

[FXSCALPER2]

Nice idea but it doesn't work so well because you will end up with just one position opened after a move in that direction - if it doesn't continue or it reverses you've lost money. Transaction costs are not so big anyway...

I can't believe you said that. I mean I don't want to insult your intelligence by explaining this.