How you deal with news releases being an intraday trader?

sun11

Experienced member
1,474 337
Hello fellow traders,

i would like to make a newbie question here. Just wish to know how expert intraday traders manage their trade during news release. This thread is completely to the those trader who use technical indicators for their trading decision.
In case for forex market, major news release comes out in every day in every session. No matter you trade a particular currency, due to the correlation factor, each news release has some effect in major currencies. So i just wonder, what is your approach in such case. Suppose you are confident with your trade, there is a news release coming out, your trade haven't reach TP yet. What you do in such case, trail position if possible, if not then close position early? or be brave to hold it?

Regards
 

NVP

Legendary member
37,766 2,101
generally I step clear ................its gambling during that news release period .....spreads stretch and you will get hurt......

stay clear and don't gamble

N
 

sun11

Experienced member
1,474 337
generally I step clear ................its gambling during that news release period .....spreads stretch and you will get hurt......

stay clear and don't gamble

N

Hi,
Thank you for your reply. So if you made trade earlier than news release, during that risky time you just close your trade, even if its in a loss?

Regards.
S
 

stefcio2002

Junior member
19 3
generally I step clear ................its gambling during that news release period .....spreads stretch and you will get hurt......

stay clear and don't gamble

N


Exactly. I do not take positions if we are less than 1 hr from the news. I may even close some, especially when they are in profits. You cannot predict what is going to happen with the news.
 

richieforex

Member
60 5
Hello fellow traders,

i would like to make a newbie question here. Just wish to know how expert intraday traders manage their trade during news release. This thread is completely to the those trader who use technical indicators for their trading decision.
In case for forex market, major news release comes out in every day in every session. No matter you trade a particular currency, due to the correlation factor, each news release has some effect in major currencies. So i just wonder, what is your approach in such case. Suppose you are confident with your trade, there is a news release coming out, your trade haven't reach TP yet. What you do in such case, trail position if possible, if not then close position early? or be brave to hold it?

Regards

Although I am a longer term trader now I started off day trading so I can advise you on this matter.

Trading the news is very hard and its because of a number of factors.

Firstly news releases can contain a lot of data, you never what pieces of data the market movers are looking at. The market can come out positive but if a segment of that data is below forecast it can create a negative impact on the market.

Secondly you don't know if the news release has already been factored in. The market movers have access to data that retail traders do not have, hence why sometimes a news release will have no impact even it the figure is substantially above or below the forecast.

Thirdly brokers can increase the spread during volatile news releases.

Fourthly brokers can apply slippage.

Fifthly the brokers can lock you out.

With that said I was always willing to trade 30 mins before a news release, sometimes I would increase that to an hour if it was a major news release like NFP or interest rate decision.

I was prepared to close any trade prior to the news if my position was likely to get stopped by whipsaws in the market.

Do not fear the news, just be aware of it and manage your trade appropriately.

We had a live squawk feed which I would highly recommend, not sure how to get it or how much it would cost but well worth it.

If you are new to trading I suggest not trading before the news, wait for the release and then look for any potential opportunities after it.

I have not met a successful trader who solely trades the news but I know there are some out there, they might be able to offer some advice on the best way to trade it.
 

sun11

Experienced member
1,474 337
Hi richieforex,

Thank you for your reply. Actually, I see news releases as an obstacles because of the whipsaws & spreads. Honestly my intention is never to trade news. But for intraday trading, news release has some effect, unless I trade end of the day.
But i got your point very well. Looking for potential opportunities after news release is really good idea. But if any trade left in loss before news, closing trade with small loss might be better option i guess.

Regards.
 

gerryg

Established member
900 7
Hello fellow traders,

i would like to make a newbie question here. Just wish to know how expert intraday traders manage their trade during news release. This thread is completely to the those trader who use technical indicators for their trading decision.
In case for forex market, major news release comes out in every day in every session. No matter you trade a particular currency, due to the correlation factor, each news release has some effect in major currencies. So i just wonder, what is your approach in such case. Suppose you are confident with your trade, there is a news release coming out, your trade haven't reach TP yet. What you do in such case, trail position if possible, if not then close position early? or be brave to hold it?

Regards

Sign up with some Ultra-low latency broker/software for $$$ (what I doubt you can find with less than 10K) and then you can call yourself competitive trader at news times. :D

However there are still some workarounds for retail Fx fellows (for example news straddle). They're different to implement but still possible. To make news trading reasonable, orders should be placed before news release (30 sec) and only with 0 pip distance for SL (as I have on Tickmill).

One news trade in a month may worth hours of scalping with red eyes, heavy head etc.
Make your choice wise :whistling
 

Forexmospherian

Legendary member
39,928 3,301
generally I step clear ................its gambling during that news release period .....spreads stretch and you will get hurt......

stay clear and don't gamble

N


I cannot give you a simple black or white - yes or no answer with regards to every news release - but as NVP says - normally I would agree and be out of any scalp or short term intraday trades 5-10 mins pre news and just wait and watch the first part of the reaction whilst sitting on my hands.

I only trade FX pairs and for me - to make consistent monies on a session to session basis - you cannot just treat any part of trading as simple or easy - it is if you are just having a "punt" - but if you are a serious intraday trader there are so many factors to consider in a dynamic market place.

First question is maybe even ranking the red news announcement - as some red news high priority announcements might just have an effect on just a few pairs and not across the board. For example we all know the NFP on one freaky friday at the start of every new month will have normally a big effect on all major currencies.

But you can have major announcements on say the Australian or New Zealand dollar - and still stay in swing trades on the GU or even the EU.

When I am scalping or just short term intraday trading taking trades that should complete within 30 -60 mins - I will chose pairs according to the news calender of the particular day. ie most UK Pound red news announcements might happen at 9 30 am UK time or between 10 am and Midday. So from both the EO and the LO you might get a "pre news" set up - ie a move set up by the market makers to take the pound up in price by say 25 to 40 pips over a course of an hour or two.

I would stay with an up move if my technical set up says its still scalp bullish right up to between 3 and 9 minutes before the actual release . In fact the last 20 mins before news can be good as the market makers know most intraday traders will not be in the trade and feel its too unsafe to jump in with only say 10 mins to go.

Then after a "pre news " set up - suddenly you might find the news sends the pair 40 -70 pips the other way with a one way spike. If you are with a spread betting bucket shop - yes you can trade it on demo - but on live - you will not get the price you want - and then once you are in - you might find it can be 2 to 3 mins before you can get out if you are on any decent stake size - and then not at the price you want.

I have traded secondary red news announcements with a ECN or STP broker with both good and bad results. The good results will come if the direction is clear and the news is as expected and the 2 way prior spikes are reasonable ie only 5 -10 pip stuff - but when you get a 25 or 35 pip spike up or down followed by a 70 pip spike up - all under 30 seconds - then really - you need either big bolls along with big stops etc and be praying - ie not the way to trade.

There are ways to trade red news release and my own way is to wait normally 3 to 9 minutes after the release and works out the size of the pullbacks and whether the PA as legs or whether it will all fiizzle out and go back into a range within 20 -30 mins - before another move - either way.

Remember FX is a big money game - and you can have 50000+ retail traders buying the EU at or after news and the TA and the PA clearly say it going up and it does 15 -30 pips - and then one player / Bank etc says - I want to sell from that price at this time - and then just tips the table up and takes the pair the other way by 70 -100 pips all within 30 -60 mins.

If you are a swing trader with big stops and after say 250 -500 + pip targets - then you possible dont bother about most red and less major news announcements - as you fell clear on a direction and so will ride the effect etc .

If you swing trade with stops under say 30 pips with targets of say 70 -150 pips - you need to check the weekly calender and ideally chose the period you enter your trade - as you dont want to be up say 40 pips in profit in the early morning and then see after news and in the US session you are testing your stop area.

Believe me - this is a short answer - I could go into the real detail of how you can benefit from important news releases both prior and after the events and all the clues and signs to look out for to help you with your decision making etc - whilst totally ignoring Bloomberg / false order flows / rumours etc etc - but most traders prefer KISS etc - so maybe its best to not even go there

Hope that helps from how I see it from my own perspective

Good Trading


Regards


F
 

sun11

Experienced member
1,474 337
Hello Forexmospherian,
Thank you for answering my question in details, it clears my doubt. Completing trades within a selected time limit may not be always possible for me, as its more like an intra day swing. My stops are generally 15-20 pips & Targets varies from 40-70, sometimes more, if market moves in my direction with less choppiness, then I pyramid. But on red news days, as you said it can test my SL, closing early is better option.

One news trade in a month may worth hours of scalping with red eyes, heavy head etc.

I guess you are referring NFP.
Well then I have be the trader like Mr. Wayne McDonell :cool:
 

billyjean

Active member
120 5
Sign up with some Ultra-low latency broker/software for $$$ (what I doubt you can find with less than 10K) and then you can call yourself competitive trader at news times. :D

However there are still some workarounds for retail Fx fellows (for example news straddle). They're different to implement but still possible. To make news trading reasonable, orders should be placed before news release (30 sec) and only with 0 pip distance for SL (as I have on Tickmill).

One news trade in a month may worth hours of scalping with red eyes, heavy head etc.
Make your choice wise :whistling

sound like NFP,FOMC kind of news release. put an order before the showdown, based on past experience not all those news release always end up as we wishing for. or for some reason do you suggest to put several order to catch the market spike ? since the SL are 0 pips distance all of the order should end up with 0 pips result ?
I knew tickmill trading condition are favored for scalping entry method, but for news release sometimes I use trap entries with lot sequence do the profit works in minutes.
 
 
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