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Forex News Trading: Trades for week of Jan 29 thru Feb 3, 2012
Forex News Trading: Trades for week of Jan 29 thru Feb 3, 2012
Before taking a look at the upcoming stuff I wanted to mention a couple things.
We had a couple terrible trades last week. It should go without saying that we are not out of the woods yet with regards to the European situation which I believe is creating huge headwinds for the Forex and Futures markets. I am going to continue to trade cautiously (a concept I deviated from last week a couple times with unpleasant consequences) until things have turned around.
In fact, I am quite irritated at the trade behavior we saw, so I am doing something about it. The Futures market is vastly more volatile than the Forex if you can believe that, so code written for it must account for that volatility and try to protect the trader from it. I have taken 3 of those concepts and incorporated them into the Straddle. Had they been in place last week, my 4 digit losses would have been cut by 80 – 90%. Would have still lost, but relatively very little. It is easy to write code that makes money in markets that always behave a certain way. It is much harder to write code that minimizes your losses in all cases.
Anyway, the changes are:
1) If one of your orders goes live before the data comes out, you can have your trade closed immediately. You risk losing the spread in this case but are not subject to the market moving against you if the data comes out the other way, which it often does.
2) If your live trade is in against the data (you are in on a sell when the data comes out as a safe buy, or vice versa), your live trade will be closed immediately.
3) You can request that as soon as your trade goes live, a hard stop is put in as tight as the broker will allow (if your broker allows stops to be placed at that time) and the opposing trade is cancelled if the stop is successfully placed.
These 3 things would have saved me a ton of headaches last week, and from what I saw in the Skype room, I am not the only one. I did some testing late last week and will do more this week. This will be done soon. Keep in mind that in fast moving markets, there is slippage and some brokers will try to block these things from happening, but some will not. There are a number of trades I will be doing this week to test the new code out. I will get this on the street as fast as I possibly can. It will be release v 2.36.
Speaking of the Skype room, I am noticing an increase in venting and complaining in there. We all know the markets are doing poorly right now, particularly those of us that make a living off trading the news. Being reminded of that serves no useful purpose. Posting wins and losses, and discussing the trades and strategies is a good thing. Discussing bad trades is a good thing. Coming up with constructive ideas on how to counteract some of the trade behaviors is also a good thing. There are a lot of savvy traders among you whose cumulative creative juices should be put to use for the practical advancement of the product. That benefits everyone. I am willing to entertain ideas from any and all of you, and have gotten some great ones, most recently from a trader named Andrius. If you are uncomfortable discussing ideas in a public forum, simply Skype me directly, post in the blog, or Email me.
Now, for the upcoming week we have a few opportunities. All of these are potential Straddle trades and OT trades, so plan your week accordingly.
Tue 1/31 8:30 AM – CAD GDP m/m
Wed 2/1 4:28 AM – UK Manufacturing PMI
Wed 2/1 4:45 PM – NZD Employment Change q/q
Fri 2/3 4:28 AM – UK Services PMI
Fri 2/3 7:00 AM – CAD Employment Change
Fri 2/3 8:30 AM – US Non-Farm Employment Change
Forex News Trading: Trades for Wednesday, Jan 25, 2012
Forex News Trading: Trades for Wednesday, Jan 25, 2012
4:30 AM Eastern
UK Prelim GDP q/q – Change in the value of all goods and serviced produced by the economy
GBP/USD
In normal times, this is the best news trade there is. We have seen spikes of 70 pips on a deviation of 0 before. But don’t expect that tomorrow, though it will be very interesting to see how it reacts, particularly if we have a big deviation.
In April we saw deviations of 0 and 0 with a spike of … uh … 71 pips.It was up 109 pips in 20 minutes. In July we saw 0 and .1 with a spike of 72 pips. Was up 90 pips in 2 minutes. Then in November it came out at .2 and 0 but only spiked 30 pips and retraced hard. This came out 2 minutes after the UK Manufacturing PMI trade, and came out in opposition to the PMI trade. I don’t think we can read too much into this.
I expect if we get a deviation of .2 or greater, we will see at least a 30 pip spike but I am anticipating a hard retracement. Be sure to protect your trade. Watch for lots of movement before the trade. If you want to set your buy/sellPips up a couple pips, to maybe 7 or 8, that might be a good idea.
ORACLE TRADER – I’d try medium of .2 and safe of .4, trading 1/2 your normal lots on a medium and 3/4 on a safe.
STRADDLE V1.3 – set maxSpread to 8 or 9.
STRADDLE PRO – set Buy/Sell Trigger to .1 and check the box.
3:00 PM Eastern
NZD Official Cash Rate – Interest rate at which banks lend to each other
NZD/USD
Well, the economists are in agreement about this one so it will likely not be a good opportunity.
ORACLE TRADER – set safe to .25 and use full lots.
STRADDLE V1.3 and PRO – I’d avoid it. If you really must, set buy/sellPips to at least 15 or 20.
Forex News Trading: Trades for Tuesday, Jan 24, 2012
Forex News Trading: Trades for Tuesday, Jan 24, 2012
8:30 AM Eastern
CAD Core Retail Sales – Change in the value of sales at the retail level
USD/CAD
I don’t have much in the way of good notes on this for the last 3 months because I didn’t trade it. What I do have looks like the biggest spike we saw was 11 pips in any of the months. The reason I included it here is because we are starting to see a bit of a resurgence in the CAD trades. I think it is worth a try, albeit with very conservative lot sizes.
ORACLE TRADER – this is really tough. I’d try .4 medium and .7 safe, trading 1/3 your normal lots on a medium and 1/2 on a safe. I doubt it will hit these deviations.
STRADDLE V1.3 – set maxSpread to 6 or 7. Get out fast if there is no movement.
STRADDLE PRO – set Buy and Sell Triggers to .2 and check the row 1 box. You might want to lower your spread numbers a bit from the defaults. Also set either trailing stop or take profit, and use the stop line to take your trades out.
7:30 PM Eastern
AUD CPI q/q – Change in the price of goods and services purchased by consumers.
AUD/USD
This has quite a good history. In April it came out at .4 and .2 with a 32 pip spike, small retracement, and continuation to 45 pips in 7 minutes. We were printing money at the time, and the presses were running strong for this trade. In July it came out at .2, .2, and .4 with a 60 pip spike, small retracement, and continuation to north of 100 pips in 6 or 7 minutes. Made another killing here. In October, with the markets well on the way into their freefall, we saw 0 and .3 but still got a 33 pip spike. It retraced 15 or 20 pips fast, then continued back into the 40 pip neighborhood.
Watch out for early moves or late data. Lets not get caught off guard if screwy things happen. If they don’t, we will likely see a decent trade. If it spikes early (before you are in), turn off the OT or disable EAs on your MT4.
ORACLE TRADER – try .2 medium and .3 safe. Trade 1/2 lots on a medium and 3/4 or more on a safe.
STRADDLE V1.3 – try maxSpread of 9. Might want to set buy/sellPips to 7 or 8, or more.
STRADDLE PRO – set Buy/Sell Triggers to .1 and check the box. Set buy/sellPips to at least 7. Might want to set stopLoss to 0.0. I’d still trade this somewhat conservatively.
