Initial Claims News Trade
June 22, 2006 by Trader Rich
The initial claims report is released at 8:30 am this morning. This has been my most successful news trade over the past 3 weeks with a total gain of 59 pips so we'll see how it goes today.
Riverman from forexforays.com stated in a comment regarding FX Engines: I kept getting caught by wild whipsaws in the price right around the
news event, which on more than one occasion ended up triggering trades
in both directions and taking out both my short AND long stop-losses.
This has not happened to me yet but I can see how it could. He also stated that the initial excitement of the platform has faded and I have to agree with him. Don't take this as meaning that I don't think it can make me pips because I really think it can (and it has so far). As I've said so many times before, with a 10 pip stop loss and the potential of catching a news trade that has a large price spike, I don't think you're risking a lot. I think the excitement has worn off more because there really isn't anything to trading the news. I subscribe to an engine and it automatically triggers based on price action. I'm not looking at charts, or calculating risk/reward, targets, or stop losses. I'm really doing nothing! Where is the excitement in this? The excitement is in that 1 minute or so when you catch 30 pips and then it's gone.
On another note, check out Riverman's post from yesterday, "Signs you may be overtrading." I can say from experience that he isn't the only recovering overtrader.
Popularity: 1%
Loading ...
There was NO news trade today. It all seemed to happen overnight…
I was watching the market and it didnt look like it move but still my agressive engine triggered and lost 11 pips. Pretty frustrating…
I’ve been successful with moderate engine last 2 weeks with the Initial Report. Maybe you want to stick with moderate or conservative.
I think I read in one of the Market Wizard books a comment that sounds appropriate: a trader said someting like “trading’s not really supposed to be exciting - it’s all about profits.”
This is my second (virtual) trade with FXEngine, and it gave me a loss trade again
But my ‘manual’ news trade made 4 pips (not bad for a wrong position
)
Initial claim does frequently cause large move, but, somehow, not this week. Perhaps next week…
On my perspective, FXEngine advantage is only that you can automate your trade. But if you have time, maybe it is better you trade the news by yourself. I’m still learning on this though…
Hendra, I don’t think I would say that it is better to trade the news manually. Either way discretion is necessary but trading manually won’t give you the risk/reward from trading automatically. Some people are already getting discouraged from FX Engines just because it hasn’t produced over the last week or so. This is going to happen whether you trade manually or automatically. The news releases over the last week have not created any 1 way price spikes but this can easily happen in 1 news release and produce 5x or more what you lost. I’ve traded the news manually using Rob Booker’s stategy (which really isn’t his) and I can tell you that he trades the news commonly with a 30 pip target and 30 pip stop/loss. That’s a 1:1 risk/reward as you know which is what bother’s me about trading this way. Like I said earlier, trading the news also requires discretion. If the price is directionless or choppy as it has been and you’re subscribing to AGGRESSIVE engines, there is the potential that you will get into the trade on the 1st tick spike. Since the news hasn’t created any 1 way move, you’re going to get stopped out. In times like this, I’ve used discretion and subscribed to the Conservative engines. In 3 week of trading the news, I’m up 41 pips on 10 trades with a win % of 40. If you use multiple lots and a standard account, that’s 1230.00 in 3 weeks. In addition, the stress factor is much less.