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news trading with multiple stop orders (pip trap :))

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nhlevi
12
nhlevi 2016.08.22 12:48 

Hey guys I had a spark the other day and started thinking how to get the most out of big time news releases with the least possible risk.

For example, I place a buy stop order on eurusd just before the NFP release at 1.30026 with sl at 1.30000 (the spread + 0.1 pip) and tp at 1.30036 (1 pip), then another one 1 pip above the previous at 1.30036 with sl 1.3001 tp 1.30046 then another and so on, covering at least a 150 pip range. so the formula is:

buy stop order no1 at: X

  sl: X-(spread+0.00001)

  tp: X+0.0001

buy stop order no2 at: X+0.0001

......

Hope you get it 

The reason i would prefer this over trailing stops is that this allows for tiny pullbacks without closing the entire position. Why not a wider trailing stop then? Because thats a waste of pips already earned. With the pip trap, it may be that an order gets terminated after you've already bagged 50 pips, but there's still chance many more orders get triggered and closed at profit. 

Why is this better than 1 buy stop and closing with tp or manually? You never know how much the price goes up, and this takes the human factor out. You may see a little pullback and get frightened out of the position, but the pip trap would only allow for the least possible risk while leaving every possible chance of more pips open.

Now the tricky stuff is placing a hunnerdnfifty stop orders manually in a short period of time. So the questions are: what do you guys think? Do you have alternate ideas to get similar results, or is this an already existing method? Is it possible to do a robot or that places all the pending orders at the press of a button? Do you think it's worth it (I do)? 

I'm sorry if this is already a thing and you're laughing at me sitting on your money thrones, I have no clue!

cheers, Levi 

mql5jbentz
17
mql5jbentz 2016.08.22 22:52  
nhlevi:

Hey guys I had a spark the other day and started thinking how to get the most out of big time news releases with the least possible risk.

For example, I place a buy stop order on eurusd just before the NFP release at 1.30026 with sl at 1.30000 (the spread + 0.1 pip) and tp at 1.30036 (1 pip), then another one 1 pip above the previous at 1.30036 with sl 1.3001 tp 1.30046 then another and so on, covering at least a 150 pip range. so the formula is:

buy stop order no1 at: X

  sl: X-(spread+0.00001)

  tp: X+0.0001

buy stop order no2 at: X+0.0001

......

Hope you get it 

The reason i would prefer this over trailing stops is that this allows for tiny pullbacks without closing the entire position. Why not a wider trailing stop then? Because thats a waste of pips already earned. With the pip trap, it may be that an order gets terminated after you've already bagged 50 pips, but there's still chance many more orders get triggered and closed at profit. 

Why is this better than 1 buy stop and closing with tp or manually? You never know how much the price goes up, and this takes the human factor out. You may see a little pullback and get frightened out of the position, but the pip trap would only allow for the least possible risk while leaving every possible chance of more pips open.

Now the tricky stuff is placing a hunnerdnfifty stop orders manually in a short period of time. So the questions are: what do you guys think? Do you have alternate ideas to get similar results, or is this an already existing method? Is it possible to do a robot or that places all the pending orders at the press of a button? Do you think it's worth it (I do)? 

I'm sorry if this is already a thing and you're laughing at me sitting on your money thrones, I have no clue!

cheers, Levi 

Hi Levi,

It can be coded easily to loop 150 times, making a new stoporder each loop with the adjusted settings.  Only problem is this: the spread radically changes in news releases.  Making the 150 stoporders right away with the existing spread at that moment may not work if that spread goes from 3 pips to 9 pips in a tick, then back to 5 then to 12 then finally back to 5,4,3.

You could code it to open them then modify them all each tick, or close them all and reopen them each tick.  Not sure what the broker rules are on that, and during news trading, things are frantic, so not sure all the 150 orders would get executed within 1 tick.  Unlikely. 

Michael Maggi
1404
Michael Maggi 2016.08.24 07:11  

Hi,

Changing spread takes place much more often than people realize. There are various indicators and EAs that put the current spread up on a chart.  Take a look at it and you will see how much and how frequently it changes. There is also an off hours and "night" spread for some CFDs and pairs where the spread normally doubles, like the SPX500.  At FXCM UK it is normally 50 but will spike to 100 points.  Also tight slippage might cause you a problem along side this issue.

nhlevi
12
nhlevi 2016.09.03 16:04  
Thanks for the responses! One of my brokers has a fixed spread of 3 pips on eurusd and 60 on gold, the two I trade the most. They never changed it a tick even at the nfp release yesterday, and only very small slippages occured with my stops and tp's. Sadly this nfp did not turn out to be as explosive as I expected, with price moving up in a zig-zag, so the pip trap would have sucked big time. Conclusion is that on future news releases I'll rather catch smaller but sure profits with a simple trailing stop until I find a better way.
Bernhard Schweigert
5704
Bernhard Schweigert 2016.09.03 20:44  
nhlevi:
Thanks for the responses! One of my brokers has a fixed spread of 3 pips on eurusd and 60 on gold, the two I trade the most. They never changed it a tick even at the nfp release yesterday, and only very small slippages occured with my stops and tp's. Sadly this nfp did not turn out to be as explosive as I expected, with price moving up in a zig-zag, so the pip trap would have sucked big time. Conclusion is that on future news releases I'll rather catch smaller but sure profits with a simple trailing stop until I find a better way.
You did look maybe at the wrong pair. there was a lot of movement in for example CADJPY.
forexcue.com
742
forexcue.com 2016.09.06 19:38  

That is interesting, i use this techinque every days on XAGEUR which moves just a few pips at a time but all the time. so i wrote a script that paste 5 buy stops and 5 sell stops with 2 pips profits. once a trade is closed , the empty slot is filled.. pays real good every days.

 

Trading news is now a risky busines as some broker raises their spread way up to 90 pips... 900 points on news bars.

 forgot to mentioned that my broker offer 0 pip on XAGEUR 

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