News Trading...

Hi folks,

I heard that some people do newstrading. How does it function? Is it possible to know in which direction the market price will go after the news?

I have 3 examples for high impact or medium impact today:

12:45am NZD Building Consents Actual: 5.0% Forecast: -9.6%

11:30am CHF KOF Economic Barometer Forecast: -0.59 Previous: -0.99

2:30pm CAD Current Account Forecast: -11.9B Previous: -9.1B

What does this data declare and is it possible to pre-estimate in which direction the market price will go? Sorry for my noob question and thank you for your help.

Best regards!

Re: News Trading...

Hi folks,

I heard that some people do newstrading. How does it function? Is it possible to know in which direction the market price will go after the news?

I have 3 examples for high impact or medium impact today:

 

12:45am NZD Building Consents Actual: 5.0% Forecast: -9.6%

 

11:30am CHF KOF Economic Barometer Forecast: -0.59 Previous: -0.99

 

2:30pm CAD Current Account Forecast: -11.9B Previous: -9.1B

 

What does this data declare and is it possible to pre-estimate in which direction the market price will go? Sorry for my noob question and thank you for your help.

Best regards!

Ok, Fundamental is not my strong side, but I will give it a shot

You go to

http://www.forexfactory.com/calendar.php

and on Detail part you will see Usual Effects on the list, if it says "good for the currency" it will go UP ... so you need to know that if you have EURUSD, and USD have HIGH news "good for the currency" probably EURUSD will go down... ok

Now if this would work perfectly you would have nothing left on forex, because we would sweep the place long before you come to this ... so the problem is that some times price don't react the way we think it will, or reacts earlier or later... there is also other components that are moving the price beside the news that is ALL PEOPLE IN THE MARKET (or banks, big guys....)

Data like 5.0% is just the way to represent economic data that influences that specific currency .. you can see it on Chart part in Forex Factory Calendar...

Sorry for my bad English, and hope I help a little

Barbara

Re: News Trading...

Hi folks,

I heard that some people do newstrading. How does it function? Is it possible to know in which direction the market price will go after the news?

 

What does this data declare and is it possible to pre-estimate in which direction the market price will go? Sorry for my noob question and thank you for your help.

Best regards!

some try to do it, and before ~ 2 1/2 year it was possible to trade in the right direction , but you must have a good news provider, same reuters ( expensive ~ 4.500 $ / month ) and then a ecn broker and fast internet access , so you can go in before the whole traders jump in and out quick also .

now the forecasting is very difficult, and many news already leak before the newstime come so the big traders already move the price and if the news come out, already priced in and the price go after news in the opposite direction.

also the spread heavy and marketmaker broker wide the spread also

the only trading for news is the after news trading now, also people say after spike trading, is a price action trading

so if you new in this newstrading very careful , it can blow your account in seconds, stops will not respect in this time!!, look the biggest news before, like nfp and interrest decision

Re: News Trading...

I usually do not trade the news period because of high volatility and high broker spreads :-?? :(( ,only the first friday of every month the NFP report and I gain up to 100 pips on EUR/USD in one hour period. ;)

Re: News Trading...

Do you guys really belive in NEWS for trading? I bet people out there must have made money before the NEWS is out.

Re: News Trading...

Dear,

I believe that if we get news before releasing them, we can make real high profit, is there any way to buy news before releasing them?

Re: News Trading...

It's all about market sentiment when trading the fundamental/macroeconomic news,ifoundt. :D

Re: News Trading...

Dear,

 

I believe that if we get news before releasing them, we can make real high profit, is there any way to buy news before releasing them?

sure, but you have to pay for the news, google reuters newsservice ~ 4500$/ month, or cheaper but slower tradethenews

-- 30 Aug 2009, 15:42 --

and the best there are tools , they read the news and open the trade, like Secret Forex News Weapon and many others

but sometime newservice also writing wrong and the software open your trade , hopefully you will quick enough and your broker let you out of the wrong trade at newstime =))

cheers

Re: News Trading...

Its dangerous but I can't help myself not to trade :P However i think we can't predict where it is going just by receiving the news. Even if the result is good for the currency, it can go the other direction.

For example if US receive bad news, investor will turn into safe heaven (dollar), hence USD will gain. Doesn't happen all the time, but best is to wait after 15 min until the dust settled, then only enter a trade

In my experience so far, the best news to trade is NFP, it usually can go as far as 200+ pips. So even if you are late, you'll still be able to enter a trade since the direction is quite obvious after 10-15 min.

Other news i see only generate 40-50 pips and it is FAST, so if you are late to enter a trade, better don't trade, since there's a big possibility for the price to turn around.

Re: News Trading...

sure, but you have to pay for the news, google reuters newsservice ~ 4500$/ month, or cheaper but slower tradethenews

 

-- 30 Aug 2009, 15:42 --

 

and the best there are tools , they read the news and open the trade, like Secret Forex News Weapon and many others

 

but sometime newservice also writing wrong and the software open your trade , hopefully you will quick enough and your broker let you out of the wrong trade at newstime =))

 

cheers

Agreed, unless you've got money to pay for the news services as well as an extremely reliable broker, news trading is not an option. I suggest sticking to technical analysis.

Re: News Trading...

I agree with everyone else, news is NOT the way to trade. You must be able to get it ahead of time, which is expensive, then you have terrible fills, bad spreads, etc, etc.

But, it is a fast way to lose your money! Stay clear of news all together by a few hours and you will do much better!

Re: News Trading...

I have always gotten KILLED trying to trade news, I stay flat and watch for technical levels......

Re: News Trading...

Hello, here is an excellent meta trader indicator that shows news items automatically and also all forex clocks :)

In10tion NewsReader - [url]http://www.forex-tsd.com/news-signal-trading/14459-in10tion-newsreader.html[/url]

Re: News Trading...

The best way to trade for beginner is to start with techinical analysis.

It's easier than fundamental or news. News is NOT the best way to trade for beginner.

Better stay clear of news all together by a few hours.

Also check the calendar at DailiyFX, FXStreet, etc

Re: News Trading...

Well, it's advisable to close all open trades well before important news announcement.

However some traders I know trade only news, because volatility is really good at news time.

But you must remember, don't open a trade until first wave "false" is gone and second wave "real" impact wave is far lengthy than the first. So you can safely enter a trade on second wave, set reasonable stoploss and taleprofit (say 30 pips for stoplloss and 90 pips for takeprofit), enable trailing at 20 pips and ride the wave until your trade gets filled with green pips :)

Re: News Trading...

I don't think soo news trading is really going to work out for retail investors like us for the following reasons:-

- We don't have direct access to ECN liquidity providers so your spreads will increase drastically making it harder to trade the news

- Most of the time it would happen that the sentiment & forecase of a particular news will develop for 2-3 days and even after a positive news...the currency dips

- Recently the effect of negative data on the US side has been positive for the $US b/c of the interest in buying US Bonds/Treasuries (Safe heaven investment in troubled times). This kind of behavious is right opposite to typical news trading concepts in which bad news = bad currency. Market changing dynamics make it hard to trade the news

I guess Technical Analysis with some idea of the overall market fundamentals is the way to go.

Re: News Trading...

For the beginners news should act as an indicator of volume (maybe even a time to avoid) However one way i personally trade during high impact news releases is i set a +10 pip buy limit order (from the closing price of the previous h1 candle) and set my sl at 10 pips, if the price goes my way i try to catch as many pips as i can and get out as fast as i can. If the price goes the otherway without triggering my limit i do not lose anything if i trigger my limit and than hits my sl, i accept my loss, and wait for the next big new release to catch my profits. Its a good way to stay profitable since there is no way to predict which way the players will send the market rolling. I hope i was helpful.

Re: News Trading...

I only have bad expirience with news trading. You should know the impact of the news to the market. So good fundamental market understanding is absolutly neccessary. You should be able to get the news in the same time as the big players. AND make sure to have a broker that allows you setting trades during news releases AND more important to clse the trade without requotes. This is the most difficult par in my opinion. Spread is another issue, most of the bokers widen the spread during news releases.

With all that in mind better stay out during news time. I very often got burned so i stopped news trading completly.

Just my 2 cents.

Jens

Re: News Trading...

Price action sometimes tell you, what the markets wants to do with the news, but still sometimes spikes break these expectations.

Re: News Trading...

sure, but you have to pay for the news, google reuters newsservice ~ 4500$/ month, or cheaper but slower tradethenews

-- 30 Aug 2009, 15:42 --

and the best there are tools , they read the news and open the trade, like Secret Forex News Weapon and many others

but sometime newservice also writing wrong and the software open your trade , hopefully you will quick enough and your broker let you out of the wrong trade at newstime =))

cheers

harry007,Secret Forex News Weapon it's a EA or a system ?Do you have it?

m30 News Trading...

Hi there;

When i must new in Forex Trading, i have a rare trading by news using m30 Timeframe (EUR/USD only !), but you must enter with low leverage & we must have a bravehearth, this is only for the trader who have a mechanical mindset.

Here's the Rules :

1. Open your charts at EUR/USD, Timeframe : m30.

2. Open Forex Factory & Setup the clock by your local Time.

3. Again in Forex Factory; after we setup the clock, now we setup the calender filter by click only USD & uncheck the other pairs.

4. Check ONLY the Very Important News (red Flag Only) the rest you will Uncheck. Your Forex Factroy should be look like this (this is GMT +2 my Place, South Africa)

http://img233.imageshack.us/img233/5749/45163323.png

OK Thats it.

Before we continued, if there any question please ask before we go more deeply.

To be Continued ...

Re: News Trading...

I look forward to part 2 :)

Re: News Trading...

Thanks GOD; i thought News Trading is not intresting anymore ... :D

Re: News Trading...

Important council: if you never traded in economic reports, then first demo you practise it on an account, do your homework and get ready before you do it in sharp one.

Re: News Trading...

Hi,

Does somebody have a kind of guide providing the more often observed currency movement during news?

For example for a given indicators, if actual is better than forecast, currency is likely to go up, is it's worst, it's likely to go down...

Thanks