No Trading During NEWS HourM

Filed Under (Journal) by Casey on 20-07-2009

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I have been thinking about news trading for quite sometime now…While this rule is not something new in the forex trading realm, I believe it should also be adhere too by robot or automatic traders.

On my previous posts on Slap Me Silly Please… John123x mentioned not to trade during high impact news. This is not exactly new advice, but neither was it an old advice.

I have been thinking about not trading the news for quite sometime now before my bit(h slapping by Cyborg.

My thoughts on this only after after the day I got whacked on S26 with volatility… The EA developer told me not to trade the EA during CHF news hour especially when SNB release this news…

news01

As you can see, this particular spike up and down on the 18 June 2009 was when SNB release their news

news01a

Another instances of SNB news again spiked the chart to the sky… and that was on the week after on the 13 June 2009

news02

news02a

(FXDD is +3 GMTOffset)

News trading really kick the shit out of my account especially with S26. Again, this trading strategy is not new and I believe, to stop trading during news market hour is something that robot traders must also think about.

It’s just that I was so involve in all this scalping EA that trades only during Asian hour, one does not really put much attention to the impact on the news effecting EUR, USD, or GBP.

But since the day I took heed on SNB news on the currency pair EURCHF when it comes to my S26 EA, I started to really look into this ‘No Trading During News Hour’ rule.

Everyone knows that for EURUSD and many other currency pair, the most impactful news is obviously the Non-Farm Payroll. It’s always the first Friday of every month. And those are the times of course I do not trade… that is because by default, most EA does not trade on Friday.

Which comes about the third rule. Do not carry a trade over the weekend. Again this rule is taken care of with scalping EA because if one does not trade on Friday, then an EA would not carry a trade over the weekend.

However, when one do not trade scalping EA or an EA that does not have a build in function to stop trading on Friday. Or during news hour, then this rule becomes an issue.

It also becomes an issue when a person like me trades every bloody currency pair. Well almost every bloody currency pair. This is just crazy. I chase for profits in automatic trading so much that I tend to forget that there are certain fundamental rules in trading that I believe both manual and automatic trader should follow.

First one being the 2% risk on capital rule. Secondly do not trade during high impact news. Again, while most EA would have incorporate these rules into an EA, most do not. And those that do not, one must be very careful with the EA.

Poison EA has a nice news filter added into the EA, which would probably be interesting to have a look at it later… :)

If a news filter is not incorporated into the EA, then one can use websites to looking forward.

Forex Factory has a very nice and interesting week to week calender which now I am monitoring and looking and identifying which news would effect greatly on which currency pair that I am trading.

Another would be of course from MistigriFX.com. They have a very nice news script to be attached on top of your EA attached on a chart. Unfortunately, it expires come end July 09. Don’t know why?

Anyway, while I have put some thoughts into this, I have not put a lot of thoughts as to how I am going to incorporate this new strategy into my existing plans. Well, I guess I will have to continue to think more about this… In pursuit of profits, I need to pursuit my thoughts.

$hit!! Now I need to define what are the important news that one should not be in the market during that hour.  Sighh…..

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