Daytrading Forex - News events and slippage

K

kidPWRtrader

Hi all,

I am new to daytrading Forex, but not trading in general.

I have been doing research on the Forex markets reading everything I can in order to understand it to the best of my ability. I am far from going live on it, however as i have a few concerns.

I have traded a few of the major pairs and prefer GBPUSD AUDUSD, however i am really open to any pairs as long as the economic data releases on them is manageable. My primary concern is experiencing slippage and going being my intended risk during news events.

For instance, on index futures, with ES or NQ i go flat before FOMC and wait for the reaction before placing orders. On a similar note, can someone relay to me their experience on when to go flat or SOH to avoid such risks in forex, and what pairs are the easiest to keep track of in terms of these events.

Also to anyone who trades with small stops on GBP/USD for instance with stops of 10-20 pips, have you experienced significant slippage on news events (if any).

Lastly, are currency futures for most of the major pairs (GBP, JPY, CAD, AUD, EUR) a concern for liquidity ? I do not plan on trading anything more than 3 contracts on any of the CME traded currency futures but because my tradestation platform requires a separate account for FOREX I will start out with the futures market for them.

Hope this is clear. Thanks for any help...
 
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Quote from kidPWRtrader:
Hi all,
I have traded a few of the major pairs and prefer GBPUSD AUDUSD, however i am really open to any pairs as long as the economic data releases on them is manageable. My primary concern is experiencing slippage and going being my intended risk during news events.

For instance, on index futures, with ES or NQ i go flat before FOMC and wait for the reaction before placing orders. On a similar note, can someone relay to me their experience on when to go flat or SOH to avoid such risks in forex, and what pairs are the easiest to keep track of in terms of these events.

Also to anyone who trades with small stops on GBP/USD for instance with stops of 10-20 pips, have you experienced significant slippage on news events (if any).

Lastly, are currency futures for most of the major pairs (GBP, JPY, CAD, AUD, EUR) a concern for liquidity ? I do not plan on trading anything more than 3 contracts on any of the CME traded currency futures but because my tradestation platform requires a separate account for FOREX I will start out with the futures market for them.

Hope this is clear. Thanks for any help...
More...

I believe the Forex Calendar page at http://www.forexfactory.com/calendar.php is widely followed, where you might want to avoid trading affected currencies 15mins before/after a major news event. the degree of "impact" is colour coded so i would avoid the mentioned currency when the news event is "red". another site i bookmarked for daily commentary is http://www.fx360.com/Index.aspx but there are others like http://www.dailyfx.com or http://actionforex.com etc. i think ForexFactory's calendar page is a must to avoid your concerns about slippage and all.

i only trade spot forex, using TradeStation and GFT Forex, but not yet on currency futures. you should consider putting EUR/GBP on a chart, to help you decide if either EUR or GBP has a story move, so you can trade EUR/USD or GBP/USD based on relative strength. similarly monitor USD/JPY to help decide on ???/USD or ???/JPY depending on USD or JPY strength/weakness. EUR/GBP doesn't move much so better for monitoring purpose. USD/JPY is tradeable with low spreads usually.
 
Thank you for the response. I will update this thread later on most likely with some of my findings and additional questions if any.

Quote from bstay:

I believe the Forex Calendar page at http://www.forexfactory.com/calendar.php is widely followed, where you might want to avoid trading affected currencies 15mins before/after a major news event. the degree of "impact" is colour coded so i would avoid the mentioned currency when the news event is "red". another site i bookmarked for daily commentary is http://www.fx360.com/Index.aspx but there are others like http://www.dailyfx.com or http://actionforex.com etc. i think ForexFactory's calendar page is a must to avoid your concerns about slippage and all.

i only trade spot forex, using TradeStation and GFT Forex, but not yet on currency futures. you should consider putting EUR/GBP on a chart, to help you decide if either EUR or GBP has a story move, so you can trade EUR/USD or GBP/USD based on relative strength. similarly monitor USD/JPY to help decide on ???/USD or ???/JPY depending on USD or JPY strength/weakness. EUR/GBP doesn't move much so better for monitoring purpose. USD/JPY is tradeable with low spreads usually.
More...
 
I also prefer to trade spot GBP/JPY as it moves a lot in both directions. Good for quick trades.

Regarding futures EUR/USD, GBP/USD and AUD/USD are very liquid. GBP/USD has less tick value compared to others.

Good to trade GBP/USD futures between 3am-6am EST. The UK economic news generally released 4:30am EST.
 
Quote from daniio:

the news from http://www.fecima.com/ are very helpful
i trust them ...
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Ah FECIMA, sounds like part of the anatomy we dont generally talk about. That or a sexually transmitted disease.

I'm sure they're very good if you say so though. They should just change their name.
 
The eurdollar futures are very liquid most of the time, however outside cable/yen the futures are quite thinly traded in non-peak hours, i would stick to spot market, especially if your using automated <a href="http://www.1pipbackforex.com" style="text-decoration:none;color:#000000" title="forex">forex</a> trading systems where slippage is a bigger issue than if your trading currency pairs manually. A few pips here and there adds up.
 
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