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Author Topic: Trading Economic News  (Read 1765 times)

Offline Goldfinger

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Trading Economic News
« on: April 10, 2009, 05:24:11 PM »
Hey Donna

I came across a fairly simple strategy involving trading economic news releases.  In a nutshell, the strategy says when a higher impact news release is scheduled, within 1/2 an hour before the release (because they say trading slows into a narrow range in anticipation of the release), place conditional buy & sell orders 15 pips or so above and below the current price, then ride the trend.  Trailing Stop may have greater value in a case like this (my thought)

Have you ever used a strategy like this?  I've even seen an EA designed to trade news releases, though I haven't tested it yet.

~Rich

Offline admin

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Re: Trading Economic News
« Reply #1 on: April 24, 2009, 10:26:37 PM »
That looks a little scary to be honest. Trends don't necessarily come about following a news release, its more likely to be a price spike. Price will rise or fall dramatically, then shoot back to almost where it came from. Assuming you can actually get out of the trade at a predefined take profit level, then it may work, i.e. entry 15 pips above or below current price then a TP at a point another 10 pips above or below that. But you need to allow for a large amount of slippage too, or even the possibility that you will not be able to get out of the trade at all. Retail brokers are really not the places to be trading news. Give it a go by all means, but be very careful.
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Offline timheyes

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Re: Trading Economic News
« Reply #2 on: April 25, 2009, 02:04:56 PM »
I keep geting burned on news trading efforts. Either the market move in the opposite direction that I'm trading - though I'm always suspicious that my broker screws small players like me in favour of commercial traders. Or secondly I end up focussing on a news item in my pair and another news item affects a related pair which I didn't keep my eye on. E.g. Trading EURGBP and other news affects EUR/USD which offsets the benefits in my trade.

I've tried speculating on USDJPY based on the US trade hours trend, only to find that the Japanese do the opposite when the Asian market is open. I thought this might be a nationalistic sentiment in favour of JPY so I tried "thinking like a patriotic Jap." and that went wrong as well.

Tim

 

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