I have to say the same thing as Xela, do it if you backtest it first. Never trade something you didn't test. And if it is "regular news", not spikes, there would be no problem to enter in the market if you tested it first.
should I take trades when news causes price to move into my entry level?
- Thread starter iamnewuser911
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I have to say the same thing as Xela, do it if you backtest it first. Never trade something you didn't test. And if it is "regular news", not spikes, there would be no problem to enter in the market if you tested it first.
Thank you for your answers Xela. Yes, I have not given enough information and examples, I apologized but I appreciate your replies. I will study my method & news before making a decision on statistics & logical approaches (like how spread was mentioned).I hear you, but this wouldn't be my own approach. I trade only what I've tested and proven empirically.
(My perspective: I suspect that what you're referring to above as "logical answers" is probably going to turn out in actuality to be a collection of guesswork, some helpful information, some inapplicable theory, and generally a mixture of things that do and don't apply to whatever you're trading and how you're trading it, with little if any way to distinguish between them, and that it's therefore more likely, realistically, to lead to confusion than to accuracy.)
Skip.
Not because I can reliably show, with confidence, that it collectively loses money for me, but because my uncertainty about it together with the hugely increased risk-factors to which I'd expose myself by "trading the news", takes it well outside my own risk-management parameters. For myself, I wouldn't touch it. But that doesn't necessarily make that the "right answer" for you (which is why I didn't even offer it in my original reply).
Then please excuse my mentioning (a) that you haven't given enough information for any answers/explanations you get to be "logical" ones; and (b) that for myself, I would need to have done statistically significant testing before being able to interpret what's "logical" and what isn't, regarding the specific situations I'm looking at.
Most likely so - I do agree, in principle. It is for me, but I do actually know that from examining it carefully. Which is why I'm pretty comfortable, for myself, saying "skip". (But still, we might both be wrong, and iamnewuser911 needs to test it for himself to produce his own answer. And even if/when we're both right, the process of doing so will make him a better trader.)
You omit to mention the most important:
1) Identify trend and countertrends
If 1) is clear in your plan, you will know if your support is weak or not, if sellers or buyers got the nuts, and when to buy or not, news or no news.
You can't trade well if you don't master price action.
CM
That is true, thank you.
I have a clue on where I want to work on.
Impact size/volatility of news vs Timeframe/Strength of Support levels.
Can you share X minutes in terms of examples?
Depends on the market and the release. Non farm payroll 15-30 mins. Home sales, 1-5 usually.
Are you a scalper?
Yes.
One of the systems I built for automation only trades the news, the spreads are seldom narrow when news comes out, and you fooling yourself if you think you come out ahead in the long run of even a year of backtesting, one trade can wipe out 50 pips plus, so if you are up 25 pips, why gamble with a nice profit. It is different if you trade was long term system, but if you a day trader, I don't see why risking the profit at all. And if you back testing like 3,000 sample size? Way too many who back test have ample enough back testing, more stats you have the more you have confidence in what you are trading. Before I learned not to be in a positive position at news time, I would get creamed almost every time. Usually twenty minutes most markets settle down.