I have an account with FXCM, and I want to try a strategy that involves placing entry orders a few seconds before announcements. Anybody has any experience with that? Will my stops and limits be triggered a few secconds after the news release, or should I expect huge gaps?
stops during announcements
- Thread starter jessieblue
- Start date
This is what makes breakout trading difficult for many people. The increase in volatility just prior to an announcement, or immediately after, causes many stops to be taken out. As an example from a few weeks ago, I had a stop sell order that was twenty pips away from the bid. Within a fraction of a second my sell order was hit and the bid jumped back up over thirty points. Other times it moves more in your favor. Hard to tell when though.
My feeling is that if you are going to be in a trade during announcements or news, then it is a good idea to assume that the technicals preceding the news will continue in the same direction after the noise dies down after the announcement/news. If I am in a trade and have a stop in place, I generally remove it for a short period of time after the news comes out. I prefer to enter and exit in less volatile times.