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Exit strategies for news trading

Discussion in 'General Forex Talk' started by habrys, Feb 4, 2010.

  1. habrys

    habrys Private, 1st Class

    Dec 14, 2009
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    I started trading the news using free signals from Crazy Cat and SNW a few weeks ago. Entering trades before (or in the middle of) spike works pretty well so far. My question is: are there any clever strategies to determine the best moment to exit trades? Or is "get more experienced" the only answer here?

    I tried out a few approaches and none of them is perfect it seems:

    1. Just wait for the goal from the post of Crazy Cat to be achieved. If he says "40 pips or more" I wait for the price to move 40 pips from the pre news release price and close my position immediately. It works nearly always (except FAILED signals, which are rare), but... Sometimes the price moves much more - like 80 pips instead of 40 and I lose this potential extra gain. Good example would be Australian Interest Rate a few days ago. The goal was 70 pips, so I closed after 70 pips. But the whole move was over 100 pips in the first few minutes after news.

    2. Try to predict if the move will only barely achieve the goal or will be bigger based on deviation. It doesn't work very well for me too. The Australian Retail Sales yesterday for example. Goal: 40 pips. Trigger 0.4, deviation 0.9. So I expected 50-60 pips. The price moved a bit over 40 pips and retraced very hard after 10 seconds. I barely went out without loss. If I just closed a few seconds after news release, instead of waiting, I'd make 20 pips. How to predict that?

    3. Analyze historical data and try to predict what will happen after some particular report based on what happened before. It also doesn't work very well for me. Usually I cannot see any meaningful pattern there. I analyze months, when deviation was bigger, than trigger. Sometimes the price retraced hard and fast, sometimes you had to wait like 5-10 minutes to profit on the whole move. On the same report, just different months.

    So, do you have any clever exit strategies for news trading?
  2. cowmadagan

    cowmadagan Sergeant

    Dec 23, 2009
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    Hey habrys.

    I did a thread entitled 'scalping' and the emphasis was on news trading.

    Click that sentence to see it, and inside you'll see a link to a video I made that illustrates it.

    As far as clever exit strategies:

    Just like in life and relationships, it's timing, not strategy. Check out the thread and the video and don't for get to star it on youtube.:p

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