Quote from TRADERguy:
Most futures platforms have a Depth of Market (sometimes abbreviated DOM) feature. Double check to see if yours does. If not maybe you could open a small account somewhere else that does? When I first started I opened an account for $2,000 with an introducing broker and got depth of market through the old J-Trader platform. Their were no monthly charges for anything.
One thing that my firm does not put up with is having a position on during an important (as in able to move the market) economic release; the risk is too great. However, we do get the news (Bloomberg & Reuters) fast and our connection speed to the exchanges is faster than most. So if it is a big number I trade the 10 year treasuries on the release if the number(s) come out far enough out of range to make markets move. When the number comes out I know exactly what I'm going to do (figured out before hand for all possibilities) and, if warranted, I send off an order immediately. After that initial trade there is usually enough liquidity to play in the currencies and I switch back to the EUR/USD.
Quote from Baruch:
My trade station don't have DOM. Good idea to open another account, but I suppose DOM is mostly for scalpers?
I just can't understand their should not be liquidity to trade forex futures after the big news, but of course you know it's much better than I.
OK, so you know exactly what to do - but what if the market moves opposite to what it's supposed to do? Sometimes it happens. And - if it moves the right way - when do you take your profit?
Quote from TRADERguy:
Yes DOM is mostly for scalpers but it's nice to have (see next paragraph).
Right before a major economic release (in the electronic traded futures for EUR/USD) the market makers pull their bids and offers. The spread can open to 10 or 15 tics with 1 and 2 lots showing in the five bids and offers shown (CME shows only the first five price levels of the bid and offers). This can set off stops and the price can fluctuate wildly. If you sent off a market order for size who knows where you will get filled. Also at the release of the number the futures price can almost instantly move a penny and outrun the cash price by 90 tics, then the arb computers will slam the price back to the cash price. All this can take less than 2/10ths of a second. If you trade the currency futures on the number release (from Bloomberg pro or Reuters, whichever comes out first) you can find yourself offsides by 90 tics in a heartbeat. Granted that you will probably be OK in another minute but who wants to take the chance? Better to trade the 10 year on a major number; the book is thick enough that you can get a good fill on the number and one handle (one big number like 110 to 109) is worth $1,000 per lot, and you can trade size.
I only put on a trade immediately if the number(s) come in where they will cause a substantial movement. If the trade ever went in my face I would get out immediately at market. Either I f%cked up or there is something I don't know and the time to ponder this is after I am flat. If it goes my way then I judge how far out of whack the number was and judge how far the market will go. In reality I usually wait until the move has ended and retraced about 10%. Then I watch and see if the market is going to reject the move or whether a bear/bull flag forms and the movement continues.
Quote from nycderivtrader:
I am currently working on a system for the EUR/USD and currently have the system trading at 70% winning trades. I am still working on the system, trying to gather more data and weed out chances of large dips-
I am trading the system on a demo and may actually in the end use the system as a whistle on what side of the trade i should be on (within my time parameter) and trade accordingly.
anyone else have a system, and if so, what advice would you give me.
NYCDT