[feckoo]

Does anyone know any good trading the news sources which are really good i use Trade The News at the moment but just want to know what else is out there especially something i can try first

[David Waring]

Hi feckoo,

I personally do not trade news as in my opinion there is not much rhym or reason to what happens around news announcements a lot of the time. There are people who do not share this opinion yet and below is a list of some free educational videos from some of them:

Using Multiple Profit Targest to Trade Forex News Releases

Using Fibonacci to Measure Market Spikes on News in the Forex Market

Why Delayed Entry is Best

Why Not To Trade The News

Re-Test - Support Becomes Resistance

Trading Non Farm Payrolls When the Number Comes in Off Estimates

There is also a site which I have never personally used but that I ran across with a news trading software that you may want to check out here.

Hope that helps.

Best Regards,
Dave

[Bob O]

Do you trade the news on a live account? How is it working out for you? I'm not a big fan of TV but in the case of major schedule economic releases, your TV is the fastest medium. Bloomburgtv, CNBC, have live coverage in the day. CNBC turns to crap after the close in NY. Bloomburg TV covers the Asian/European economic releases and breaking news all night. They seem to report things faster then my newsever reports it.

I have noticed that on most forums there is a snobbish attitude toward news traders. Most of whom seem very inexperienced. These forums usually consist of technical analyst. I wonder if these people resent the fact they put so much time educating themselves, and so much hard work on strategies, and each individual trade. While the news guys jump on the band wagon. Do they feel news traders just leech off of the system? Is that why they are hated? Or is it because the whole news thing is a bunch of hype.

Is their anyone making money regularly, practicing sound money management principals while trading the news? I’d like to hear some opinions. I have some of my own. But there is a story to go with it so Ill tell you later.
-Bob O

[David Waring]

Hey Bob O,

Glad to hear from you.

Let me apologize for the typo in my earlier post as the sentence which used to read:

"There are people who do not share this opinion yet and below is a list of some free educational videos from some of them"

Should have read:

"There are people who do not share this opinion however, and below is a list of some of the free educational videos from some of them"

Although news trading is not part of my strategy, I think it is important that everyone find what works for them, so I hope everyone will feel comfortable discussing news trading, or anything else that relates to trading here.

I have some thoughts on the subject which I am getting together now and would also be interested to hear others opinions on this topic as well.

Best Regards,
Dave

[David Waring]

I had written a fairly lengthy response to this one last night but I wanted to see if anyone else had any thoughts before I posted it. To make sure I don't forget I am going to go ahead, but please feel free to continue the discussion if there are other opinions, comments or questions here.

I agree that there is generally a snobbish attitude towards news trading, and I think there are a couple of reasons for this. Most of the the biggest and quickest moves in the market, as I am sure everyone is already aware, are around news events. Generally, from my experience, inexperienced traders who think of trading as a way to make fast money without having to do much work, are attracted to the opportunities that offer the biggest potential return, and have little regard for anything else.

This is in contrast to experienced traders who, from my experience, are attracted to the opportunities which also offer the biggest potential return, but do so with the least amount of risk. So, although I am sure there are exceptions to this, generally I think when people hear someone talk about news trading, they automatically assume that person is new to the market.

Below are some thoughts on why I personally stay away from trying to trade the initial market reaction when news is released, for anyone who is interested in my thought process here:

When the market makes a big move after a news event, it does not normally do so in an orderly manner. What I mean by this, is that if the EUR/USD is trading at 1.5600 before a news announcement, and the news announcement comes in off estimates and causes the pair to jump up to 1.5650, normally there is not an opportunity to get into the market until 1.5650.

This is a problem firstly because the first price the trader is able to get, is the price after the initial move has already been made (1.5650 in the above example). Second, and more importantly, if the trader takes the wrong side of the trade into the news event, and has his or her stop in between where the market stood before the news event, and the first price immediately after the news is released, then the stop is executed not at their stop level, but at the first available price.

Using the example above, this would mean that if I went sold short going into the news event at 1.5600, and put my stop to take my loss at 1.5620, my trade would be closed not at my stop level of 1.5620, but at the first available price of 1.5650. This aspect of trading the news is perhaps the most dangerous, as this means there is no way for the traders to determine what the potential risk is on the trade.

Lastly here, perhaps no where is the individual trader at a larger disadvantage to larger traders, then when trying to jump on the initial move after a news event. The two things that matter most here are the speed with which the trader gets the news, and the speed with which the trader's platform can execute a trade.

Institutions spend thousands of dollars every month for Bloomberg and Reuters terminals, which are standalone computers that run on a private network, which is much faster than the internet. This means they get the news first, so by the time most individual trader's news feeds report the news, or they hear it on CNBC, the move has already happened. Secondly here, institutions who count speed of execution as one of their edges, spend millions of dollars on infrastructure to make sure that they are, and remain, the fastest from a trade execution standpoint as well.

These factors make the risk associated with trading a news event too great for the potential reward in my opinion.

Hope that helps. If there are any other comments, questions, or differing opinions on this one feel free to hit the reply button and join the discussion as always.

Best Regards,
Dave