FNG and DTS Daily Trade Plans Summary - Monday, July 22 2013

[Peter O]

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Forex News Gun Trade Plan

USA Existing Home Sales - 10:00am NY time (Monday, July 22)

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	Traded pair	Expected figure	Deviation trigger
	USDJPY	5.26 (M)	±0.40 (M)

	Buy	USDJPY	if actual figure is or is above	5.66 (M)
	Sell	USDJPY	if actual figure is or is below	4.86 (M)

Expected move during first 30 minutes after the release is 30 pips or more.


Review historical charts where the same deviation of at least 0.40 (M) occurred:

USA Existing Home Sales history of charts.

Once there, set filter to Difference Actual-Forecast >= 0.40 and click "Filter" to see list of charts.


To review Forex News Gun step by step trade plan go to weekly detailed posts.


--–––––————— FNG Configuration —————–––––--

Release name in FNG client: US Existing Home Sales

Clicks: first row is for Sell USDJPY button, second one is for Buy USDJPY button:



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O O O
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Diamonds Trading Signals Trade Plan

USA Existing Home Sales - 10:00am NY time (Monday, July 22)

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	Traded currency pair	:	USDJPY
	Initial spike duration limit	:	30 seconds
	Initial spike price action threshold	:	12 pips
	Triggering retracement percentage	:	40 %
	Retracement duration limit	:	80 seconds
	Maximum trade hold time after release	:	15 minutes
	Stop loss	:	10 pips
	Take profit	:	10 pips
	Maximum spread	:	2 pips

1. If between 10:00:00am and 10:00:30am, so during the first 30 seconds you see USDJPY move up or down by 12 pips or more, then enter in the direction of the initial spike at the very first 40% retracement if it doesn't take more than 80 seconds (till 10:01:20am) – and if spread is at 2 pips or less. Set stop/loss at 10 pips, and set take/profit at 10 pips immediately.
   
   
2. If the move either up or down was less than 12 pips during the first 30 seconds, then the actual number of the report did not generate sufficient interest in the market, and you simply skip the trade.
   
   
3. If by 10:15:00am, so 15 minutes after the report release, neither your stop/loss nor your take/profit points were hit, then close the trade automatically at market price of the time.

To review Diamonds Trading Signals more detailed trade plan go to weekly posts.

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[gagolek]

Dear Peter
As regards New Home Sales, do you realy think it reasonable proposal? As I see, during last 6 years the deviation of 0,4 has happenned only one time. It was on December 2011. Moreover, the direction of the spike was contrary to published news: New Home Sales has decreased, but US dollar has strengthen against JPY. Otherwords, if we had applied your parameters to last 72 releases, our trigger would be met only once, but we would get a huge loss certainly. Do you really recommend this trade with such parameters?

 

[Peter O]

Dear Peter
As regards New Home Sales, do you realy think it reasonable proposal? As I see, during last 6 years the deviation of 0,4 has happenned only one time. It was on December 2011. Moreover, the direction of the spike was contrary to published news: New Home Sales has decreased, but US dollar has strengthen against JPY. Otherwords, if we had applied your parameters to last 72 releases, our trigger would be met only once, but we would get a huge loss certainly. Do you really recommend this trade with such parameters?

Hi gagolek,

You're right – even if you probably thought of Existing Home Sales today. Anyways, similar applies for New Home Sales (coming on Wednesday) because the deviation trigger 70k there is also huge*huge and you can't find even a single event in the last three years that triggered. Honestly I'm a bit sentimental with these two events. The reason of leaving them on the list because 2-3 years ago these were much more important (thanks to Mr. Greenspan) and the predictions were more inaccurate at that time so these gaps were proper. I didn't get rid of them, however, neither I narrowed the triggering levels because these really can make weird reactions and swings. So I kept on trading with them just to leave the door open for make some pips if a very big deviation occurs. By now the trigger level is extreme as they can predict these events mostly in 20k (NewHS) and in 0.2M (ExistingHS). In several months I want to do a big run in reoptimizing FNG and DTS parameters again (and possibly trying out some auxiliary strategies) so probably these events won't be on that list. I tell you all as soon as I have news about it.

Thanks for double checking
Peter

 

[gagolek]

yes, you're right, I have made a mistake in the name of the event, but it doesn't change the essence of the problem. Peter, I see you re very experienced in that kind of trading, so maybe have you statistics of your trades, didived for particular kind of release and trigering tresholds? And how high is strike-rate? I understand, that if the treshold is so highly leveled, the strike rate shoud be high as well. Even, if the trigger is met, practically each one filled trade should be a winner. Would you please facilitate them, as I'm newbie on that matter and I don't have my own history. Or, perhaps, have you your own website where are you publishing the results?
As you have mentioned in your introducing article, I'm testing DTS strategy patiently. I'm going to make this kind of trade 20 in a row for checking the real possible strike rate. For now I have tried 2 times and both are winners: + 12 and + 6 pips. To be continued...
W.

 

[Peter O]

The reoptimailzation of FNG and DTS is going to be a bit bigger than my prior ones as I'd like to publish some statistics and history – and maybe some additional ideas to trading strategies. Anyways, it will take longer as it requires charts below one minute and several shiny web content. I won't start any other website (I don't have separate trading site at the time being) because I want to focus on content you find here on FPA.

Strike rate: now it's about 15-20% (average of the last 6-8 month).

Good to hear your success with DTS especially because I know how much depends on spread and requotes with such short term strategy.

 

[gagolek]

The reoptimailzation of FNG and DTS is going to be a bit bigger than my prior ones as I'd like to publish some statistics and history – and maybe some additional ideas to trading strategies. Anyways, it will take longer as it requires charts below one minute and several shiny web content. I won't start any other website (I don't have separate trading site at the time being) because I want to focus on content you find here on FPA.

Strike rate: now it's about 15-20% (average of the last 6-8 month).

Good to hear your success with DTS especially because I know how much depends on spread and requotes with such short term strategy.

Yesterday I was trying to trade DTS during Canadian Retail Sales release, but I didn't noticed sufficient retracement according to trade plan, so I did not trade. (do you agree with me?) I was trying to trade FNG at the same time, but in the last moment before publication I have noticed, that my broker had widened the spread up to 25 pips (to fourth decimal number)!!! So I gave up this trade. I think the most essential barrier in this way of trade is widening spread, which causes the trade totaly out of sense. Could you recommend the broker, which is not widening the spread so much?
And regarding your strike rate - you gave it in percentage, I understand it is how much your equity increased monthly averagely, but what I was asking is, how many opened trades are finished with gain.
regards
Wojtek

 

[Peter O]

Yes, Canadian Core Retail Sales was far from 40% retracement so it was no entry.

25 pip / 250 points? Brrr. Not to enter was a wise decision. Market makers often do this so that to minimize their risk - understandable at a reasonable extent - so you could use ECNs or NDDs instead.

"how many opened trades are finished with gain": It's changing but it's about 2/3 in average. There were months when all trades were successful (4-5) and there were months when it was well below 50%. However, losing trades tend to be definitely smaller in negative than winners in positive so it's normal to have a month in positive with a single winning trade.