Hi there fellow traders. Ever wonder what are economic calendars are for? Like the one here in fxfisherman? Well I am practicing my strategy on how to use the economic calendar as a weapon in trading. My idea is this, I will study the economic calendar and look for some news release and just place pending orders to catch whichever the trend will move. I will set buy stop and sell stop to catch the movement. Is there anyone i here that uses the same idea?
I have tried this in a demo account and I have earned 55 pips in one trade. The take profit is kinda small so you will earn immediately as long as the movements are strong. Hope to hear anyone in here who has the same idea.
I also included here the e-book that I based this system on. Can anyone here help me in improving the system.
Yeah I know this system, it's amazing! I have a nice EA for metatrader so you don't even need to be around when the news is released and you can still profit from the move, but the problem is that brokers widen their spread during news hours. Especially MT4 brokers
Yep that is the problem. brokers do widen pip spreads so they will earn more from it. The precious pips that you might earn might be lost.. But I think that is ok, as long as the news hits hard..Bam! then you got your take profit. Hehe.
To all traders out there who wants to use this very simple but highly effective trading system, you should create a simple program in excel that will calculate your target for buy stops and sell stops because you dont wanna get late in placing your bet. It says that you may place your orders 1 minute before the news release so you gotta hurry up or you may end up having "Invalid Parameters" problem, this is due to the pip spread that is adjusted by the brokers. So you better be prepared to make it.
As of today I earned 30 pips. I am waiting for the 8:30 am ET news release for my next trade. Not bad.
i have been checking this idea for about 2 months and lately im noticing major whips, i dont think this is just a coincidence, the biggies dont like the volitility and uncertainty and are looking to punish those who are using it, of course this is just my opinion
jer13 thanks for your opinion. There has been large whipsaws these past few weeks. Some of my trades went up in smoke and some just stayed and keeps holding. 3 of my trades last friday were doing fine. 3 of them went into take profit while 1 hits stop loss. I also think that not all currencies have these huge whipsaws, some of them just moved the way they supposed to.. I'll still check on this one, maybe I could use a punishment or two.
i had this idea in the beginning i trade forex.
but, as far as i know many broker didn't allow us place pending order during news. especially on mt broker. so is it only can be success on demo account?
but i've heard someone placing this with instant execution and successfull.
so maybe EA can work better than us.
Thanks for your opinion Libros,
I asked my broker IBFX about this and they said that it is ok. Maybe other brokers don't allow it but my broker did. I think you can use EA if you are not around at the time of the news release, but i still prefer to use an EA because you just set the parameters and that's it.
I don't usually do this using instant execution because trades like that during news release is very risky.
if any broker can do that so there is two more problem on broker side : spread widening and slippage.
i never tried ibfx but how much is spread widen ussually?
and for slippage , is pending order guaranteed fill on that price? they will say it will. but when it happen they can just say "sorry, for very volatile market we blablabla....".
not filled is OK we just spend our money on spread. but slippage? 1-5 pip can toleranted. but if >10 pip it's suck
and two more problem on market side: whipshaw & if price turn back and change direction.
for whipsaw, we can solve with choose stable currency and learn this attitude on particular news. but i've ever heard too whipsaw is only broker trick to hit our cutloss. we know on very big news the price from one broker to another broker is not same. so they can hide their trick behind this fact. i don't know about Ibfx but i want to hear comment from somebody who have tried this broker. but it's seldom market doing whipsaw,especially if we choose right currency so we can tolerate it.
Nah, if we chooose 'right' broker and no problem with them, One more problem to solve. it's actually the MAIN problem.
i never tried yet but i think straddle will work. but again only if broker allow that too, place order 'on the time' news is released. if can do this with 'OK' so back again, instant execution is better. why? bcs why use stop if we can place order during news? we put stop bcs we cannot place order during news or it remain requote and requote.
if we can solve this problem so trading news will be unstoppable
Thanks for your response,
Actually I have encountered an 18 pip spread, hmmm I don't remember what date was that. All I can remember is the currency pair is USD/CAD. The move was great and I could have taken my take profit but the spread is too wide so I complained about it. They said that it's freaking normal and much many blah blah blah. I was so pissed by it. Good thing there are no whipsaws though. My tp was taken a few hours later. I'll try to use intant execution if I am monitoring the charts during news release but I will still use my EA when I am AFK.
Libros thanks for your opinion, I really appreciate it.