Risk management during NFP / Employment Change trades
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Hi there,
I'm exploring strategies for maximum profit with minimum risk to trade during high impact news hours. Especially the Non-farm payrolls / Employment changes. I'm using IC-Markets with 1:500 leverage on an MT4 account.
To get best results during the initial spike i'm using pending executions up and down, by placing them 1 minute before the news is announced at 150 points above and 150 points below the current price.
Like many know, this startegy works most of the times. But it isn't flawless. If the cadle is shooting 200 points up (sometimes in a matter of a second) while immediately dropping down afterwards (like 400 points down), i'm losing money with the triggered buy stop if the TP isn't reached.
Look at attached picture for example. It's showing the USD/CAD forex chart at april 5th 2019 Canadian Employment Change. The candle is shooting 200 points up, and 200 points down. Could lead to huge losses ;)
So i was thinking of 2 things to manage risk on this one:
1) Going for a Take Profit after 100 points, in both directions. With the slipperage during news hours, this could suck as well. But i think with a Forex VPS it might be a good solution.
2) In case the TP isn't hit, going for automated market reversal on the triggered execution when the price is going in the opposite direction of the current price that the order was placed.
So for instance. If you place a buy stop at 1.11100 with a TP at 1.11200, i would like a reversal order to be executed when the price is going below 1.11099 (automated hedging) untill the other pending execution is triggered (so a TP on the reversal before the other one triggers).
My question: does anyone know if scenario 2 is possible (please share your opinion) and if so, how to put into practice?
Looking forward hearing from you.
Kay