Trading Tip – Avoiding News Volatility

[dccruibay]

Trading Tip – Avoiding News Volatility

When trading the smaller timeframes, you have to be aware of News Releases. These can cause the market to spike & can cost you profits.
Of course, some people like trading them, but if you are a trend trader, they can kill your account.

The win/loss ratio on the lower 5m charts is around 65% to 75% (if you have a good trading system), depending on the pair – very good.
But, on the 4 Hour Charts it is up around the 75% to 90% mark.

And, this is because the lower time frames are influenced by “random noise” like News Releases.
Your main focus when trading should be to minimize your risk, and one way to minimize do this is to avoid trading around News Releases.

But, sometimes it’s hard to remember that news is coming up.
Some people use special indicators, but these can slow up MetaTrader, others use kitchen timers to warn them.

Here is another method.
At the start of the day, go to Forex Factory, open up their Calendar, set it to your time & mark on your chart where the main News Releases will occur – ahead of the candles.

Just draw the line, RightClick on the Line & go into its Properties, and under “Parameters” you can tell the line to jump hours ahead off the chart to when the News occurs.

Then as the time comes closer, the Line will appear on your chart as the candles march forwards.

 

[RandomOne]

Good points and observations, I also have noticed from the correlation with non-farm payroll that news events for my crude strategy is overall bad, but on back-test it is hard to program in all the events to avoid them.

I dream of 75%+ hit rate, one day I will get there.

 

[TradeTraka]

Here is another method.
At the start of the day, go to Forex Factory, open up their Calendar, set it to your time & mark on your chart where the main News Releases will occur – ahead of the candles.

Just draw the line, RightClick on the Line & go into its Properties, and under “Parameters” you can tell the line to jump hours ahead off the chart to when the News occurs.

Then as the time comes closer, the Line will appear on your chart as the candles march forwards.

This is good, I like it. Simple but effective. Thanks for the tip.

 

[arabianights]

thanks for pointing this out, I'm a total moron

 

[tomorton]

dccruibay - Google tells me this digital diaorrhea has already appeared elsewhere on the internet not less than 51 times.

Perhaps it would be more interesting if you copied and pasted the definition of plagiarism, you will find this on lots of websites. But I'm not sure you can appreciate my irony.

 

[trader-john]

dccruibay - Google tells me this digital diaorrhea has already appeared elsewhere on the internet not less than 51 times.

Perhaps it would be more interesting if you copied and pasted the definition of plagiarism, you will find this on lots of websites. But I'm not sure you can appreciate my irony.

But I read this information first time and it was useful for me.

Dccruibay, thanks for posting or copying.

 

[jassaal123]

Trading Tip – Avoiding News Volatility

When trading the smaller timeframes, you have to be aware of News Releases. These can cause the market to spike & can cost you profits.
Of course, some people like trading them, but if you are a trend trader, they can kill your account.

The win/loss ratio on the lower 5m charts is around 65% to 75% (if you have a good trading system), depending on the pair – very good.
But, on the 4 Hour Charts it is up around the 75% to 90% mark.

And, this is because the lower time frames are influenced by “random noise” like News Releases.
Your main focus when trading should be to minimize your risk, and one way to minimize do this is to avoid trading around News Releases.

But, sometimes it’s hard to remember that news is coming up.
Some people use special indicators, but these can slow up MetaTrader, others use kitchen timers to warn them.

Here is another method.
At the start of the day, go to Forex Factory, open up their Calendar, set it to your time & mark on your chart where the main News Releases will occur – ahead of the candles.

Just draw the line, RightClick on the Line & go into its Properties, and under “Parameters” you can tell the line to jump hours ahead off the chart to when the News occurs.

Then as the time comes closer, the Line will appear on your chart as the candles march forwards.

 

[wilczek]

Here's a tip - http://forexuseful.com/authors/forex-useful/trading-forex-news-releases-infographic

 

[Traderallen]

As a scalper I love trading the news I have a very strict method the way I carry out my news trades. And I've a very high when loss ratio.
I do however disagree that it's worse trading around these times using the smaller time frames you can get whipsawed just as often and lose more pips on the longer-term time frames. For example my scalps (not my news trades) have a 10 PIP stoploss that fires off automatically when I enter my trade so the most I'm going to lose would be around 10 pips. I know spreads widen all that crap but odds are 10 pips is I'll get for a loss and least with my broker. If I'm swing trading or position trading my stop can easily be 50 pips or more below my entry and News spikes especially the euro and the yen can far exceed that in mere seconds. Costing you dearly.
Putting the advance line on your chart is a neat idea. I use the currency strength meter that's free from Henry Lu Forex it alerts me five minutes before any important news.
I do however recommend that all new and most amateur traders should avoid trading on NFP Friday that is a very volatile day and very easy to lose your tail.