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Trading the news


Over the years, I have had great success trading market moving news, as it hits the wires. It's easy to see the trade setting, however. For example, this morning we had the Empire St Mfg. survey at 8:30 a.m. EST. 30 minutes prior to that, the market held 1341.50, so this ws an area of interest where many stops might have been placed and an area of demand as well. My strategy was to enter a sell stop at 1341.25 about 15 seconds prior to the news release betting that if the news is bad, that level would break quickly and trigger stops. If the news was good and the market moved up, I instantly cancel my order

And indeed, the trade worked. I got filled at 1341.00 and grabbed two points--done for the day. I like this setup even better when the so-called "support" area is an even number; that's an area where many novices place their stops. Hope this helps your trading plan.
Congrats Ruvan...the part I don't like about this is that you have high risk for a two point reward.....the market can easily hit both buy and sell stops when news hits......so you could get a spike in either or both directions....

I've done this too so I am not preaching or judging you...good trade though
quote:
Originally posted by ruvan

Over the years, I have had great success trading market moving news, as it hits the wires. It's easy to see the trade setting, however. For example, this morning we had the Empire St Mfg. survey at 8:30 a.m. EST. 30 minutes prior to that, the market held 1341.50, so this ws an area of interest where many stops might have been placed and an area of demand as well. My strategy was to enter a sell stop at 1341.25 about 15 seconds prior to the news release betting that if the news is bad, that level would break quickly and trigger stops. If the news was good and the market moved up, I instantly cancel my order

And indeed, the trade worked. I got filled at 1341.00 and grabbed two points--done for the day. I like this setup even better when the so-called "support" area is an even number; that's an area where many novices place their stops. Hope this helps your trading plan.

Thanks Bruce. I always set the stop for 2 points, so the risk/reward is 1:1 and when the report is one which can really rock the market,i.e. employment, FOMC, I set the dom for a scale out up to 5 points. All in all, this is one of my best setups.
From here on out, I'm going to post my "news" trades and number the threads sequentially, i.e., News trade #2, 3, 4 etc. Let's see if these setups are consistent moneymakers. I will give a brief explanation of the trade, entry timestamp and result. Typically, there are 2-5 trades a week depending on the calender.
I will miss out on trading the 8:30 reports today.