Hello Fellow Traders,
In addition to the great news that you have a freely available news trading tool with direct news server connection from now on, I can tell you that you are not alone with setting up release parameters. I'm Peter and I'm going to share with you my weekly trading schedule and parameters just to make it easier for you to grab some money from the forex market.
As a first step download Forex News Gun client:
This is a standalone application, no need to install and it doesn't make any changes in registry (and actually it doesn't write anything on the disk). That is it requires minimal administration - probably the simplest is to save it on the desktop.
Reading this thread you're probably willing to know more about how some money can be made on news spikes. Well, some say that news trading is already dead. If they mean that they are not able to multiply their accounts by 100 in a day then probably they're right. In my opinion new trading is getting mature. News makes market move and will do for a long time, you simply need an appropriate approach, mindset and environment to benefit from it. More precisely here is my list of things you may have at hand and mind:
- Proper trading parameters based on historical market analysis.
>> From now on you can follow the parameters I use in daily practice.
- Proper local trading environment (trading platform, news trading application, network connection).
>> Now you can add news trading application to your trading environment for free by downloading it for Windows or Mac.
- Proper broker (appropriate spread policy, no execution delays and requotes).
>> Read your broker's policy and make low risk experiments preferably on a live account. ECN/STP brokers are preferred of course.
- Proper money management.
>> Use constant and moderate percentage of the account balance. Keep in mind that we trade volatile markets.
Using these principles I experienced consistent profit over a longer period - and I also experienced what happens when any of these conditions is not met. Once when I saw that significant losses had appeared in the account statement after some research I realized that new spread policy of my broker took me to minus 15 pips at every spike.
Now you have a really great tool for spike trading and from this week you can read my previews of upcoming events, trade parameters and even more (let me not announce too much for now) that gradually build up from week to week. I tell you, if you have 8.5 minutes now you can have your first automated news trading environment. It only takes 5 steps:
- Download the Forex News Gun client to your computer for Windows (fng.exe) or Mac (fng.jar).
- Go to the review of the next release in the Forex News Gun signals.
- Start yourand open the execution window with Buy and Sell buttons for the currency pair you find in the release signal parameters.
- Start Forex News Gun client and set buy and sell triggers according to the release parameters and set Buy and Sell button locations. You can find detailed description at each release data at the forum.
- Make sure that both platform and FNG client are running at the time of the release andwindow is on the top of other windows (in order to catch the screen click from FNG client when release triggers).
Now you have slingshot with motion sensor, just don't forget to manage your position so that to close it in profit. It's a trading method so don't let it run too long (initial lasts for several minutes). Don't worry if release figures don't often - we are about to pick low hanging fruits. As I see now 58 releases triggered out of the last 250 so about every 4th-5th release results in an open position. It may seem boring sometimes (I see a 24-day period last year with 15 releases without a single trade) but believe me, if your trading strategy seems boring then it's a very good sign.
Let me tell you a good news again. Together with FNG setups I'm going to share with you series of parameters for another trading technique: the Diamonds Trading Signals. This is practically an after- trading method and as such it doesn't care much about actual release figure but price pattern evolvement instead. I don't trade every release type using this after- technique but I will always post a DTS trade plan together with FNG when it's applicable.
Diamonds Trading Signal trade plan benefits from trend continuation and its parameters help to identify a , entry level, and . Here are the steps of a DTS trade plan:
- Set up single click execution on your broker platform, and if possible, pre-determine default stop/loss and default take/profit to a given number of pips, so that when you click to execute your order, your platform will automatically set your stop/loss and take/profit at that distance from your entry price. Do not try this with brokers that don’t offer single click execution.
If your platform does not allow to pre-determine default stop/loss and take/profit, then after entering the trade, simply set the stop/loss and take/profit points manually.
- Pull up either tick, 1-second, 3-second, or 5-second chart, and 15 seconds before the announcement, start paying very close attention to the price action of the currency pair we trade.
- If during the first short period of time (in most trade plans less than a minute) after the report you see the price move up or down by given pips or more (you will find numbers in trade plans), then enter in the direction of the initialat the very first sufficient retracement (given in percentage), but only if your spread at the time of your entry is tight enough (also given). Set stop/loss take/profit according to the trade plan.
The retracement will happen within seconds. Don’t draw anything on your chart, and don’t try to get a perfect entry. As soon as you see the sufficient retracement on your chart, compared to the initial , click to enter without any hesitation.
If the move either up or down was too small during the first , then the actual number of the report did not generate sufficient interest in the market, and you simply skip the trade. If your spread at the time of desired entry is too high, then skip the trade.
- If after a perdetermined period neither your stop/loss nor your take/profit points were hit, then close the trade automatically at market price of the time.
Important Note: it’s absolutely not necessary to know the number that was released for this trade plan. It’s based 100% on price action. Price action decides whether it’s worth trading.
Be patient, and do at least 20 “second wave” trades, before getting frustrated and quitting.
Once you become good at it, you will be able to win on average 7 to 8 out of 10 trades.
Keep win to loss ratio at 1:1. Tweak it only after you are consistently profitable with 1:1.
Remember, it does not matter whether you make or lose 10 pips or 100 pips on a trade. What matters is how much money you make or lose on a trade. When risking 10 pips, simply put up 10 times more lots than you would when you risk 100 pips, and at the end you will make or lose the same amount of money. Yes, spread to pips targeted ratio matters, but these news “second wave” moves have such high probability of success that they somehow make up for the very high spread to pips targeted ratio (2 to 10), which is a small miracle in itself.
For convenience I will always include these steps with specific numbers in my signals so you don't need to come back to here every time.
I think that's quite enough for now. I hope you will see the benefits of these trading techniques soon in your account statements. If you have any question just post it here - I'm lurking around.
May the constancy be with you,
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01-20-2013, 11:04 PM #1
Introduction to Forex News Gun and Diamonds Trading Signals
Last edited by Peter O; 02-03-2013 at 10:45 PM.
01-21-2013, 04:09 AM #2
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01-21-2013, 06:31 AM #10
Just wondering: I was part of Felix's original Diamonds room, and used an early version of SNW there. Are the names "gun" and "Diamonds" above inspired by that? Not sure who you are (Peter), but I imagine if you were part of the group back then I probably know you. Those were the days; the 2007 news trading "happy time" hehe...will be keeping an eye on your project here. Appreciate your work"The greatness of a nation and its moral progress can be judged by the way its animals are treated."-Mahatma Ghandi
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