- Consistent Profit, Consistent Profit, Consistent Profit...... (not entirely possible)
- Ability to trade every news event, without a loss (not entirely possible)
- Super intelligent system that will beat the market at its game (possible but not all the time)
Based on my experience in news trading I came up with what I call the basics and essential tools that would aid and improve a high-win rate in news trading. The combination of these tools does not make it a perfect system (holy grail) although it can get close to it depending on the knowledge and skills of the user. It is therefore extremely necessary to work on yourself because a perfect system with an imperfect user will always produce an inefficient result.
Lets start with the essential basics and then we proceed to the tools....
BASICS
- You The greatest tool in Forex trading is YOU. You are what you know and the more good knowledge you know about Forex the more successful you'll become. Knowledge they say is Power. You MUST acquire deep knowledge about Forex not just buying and selling but the underlying tricks, intrigues, secrets, both technical and fundamental principles of news trading.Based on my interview with some traders I noticed that what they actually need is just a little bit of indepth knowledge added to the trading systems they've acquired then they'll excel and reduce the consistent losses. In some cases many got frustrated, and backed out of news trading too soon.
See: Popular issues and complaints traders' make about news trading & where they got it wrong - Computer SystemThe area of focus here is not just the kind or specs of the computer system although its really important we use the best computing resources in trading Forex (a CPU of 2GHz & 2GB RAM upwards is suitable). The area of focus here is the right data connection (speed and reliability). Most news release comes with very swift reactions that are capable of sending price feed servers to go nuts. In some cases news data source comes in late after the action has occurred due to the insufficient capacity of the computing resources, and data connection reliability to pull down data from them. In this case a VPS is a great tool for 100% efficiency in news trading due to their massive resources, and robust hardware architecture.
- Broker
This is another very important area where many traders get so confused and frustrated. We receive lots of inquiries like "which broker is the best for news trading?" or "where can I get a broker without slippages, requotes and low spreads?" The answer is you might not get a 100% perfect kind of Broker but at least you can truly get something close it. A common mistake most traders make in news trading that leads to slippages is when they try to manually place an order few seconds to a news release. The chances of getting slippages becomes very high due to the huge demand and super speed (surge) of price from liquidity providers all over the world at split of seconds. Even intelligent auto click EAs sometimes fail in this scenario. However the following considerations are important when it comes to news trading and Brokers. - Account
Not all account types are recommended for news trading. An ECN account or an STP Broker with either currenex or related account of such type is preferable. Using a mini or micro account with an insignificant balance might be disastrous for news trading, except you want to trade with mini lots of 0.01, which might be unprofitable at the short run. Some Brokers have dedicated accounts for news trading. - CapitalDoes the amount of capital required for news trading matter? Yes! but with disciplined money management rules a little amount can swell up to a large ocean in due time. Honestly it will be gambling to start with a minimal sum of $100 for news trading. The kind of volatility here might crush it to bits in only one event if something goes wrong. This is worse for new beginners. Most traders misunderstand the word from Brokers - "Minimum Deposit" as to mean recommended capital for trading Forex. Hence they jump in with the minimum (a little amount), and then get fried at an early stage.
See: HotForex Zero Spread Account (specially designed for News Trading & Scalping EAs)
- Certain account types are protected from unusual spread widening. However from close observations, there are certain events that these special accounts cannot totally control when it comes to spread widening. For example events like Interest Rates, & Employment Change that requires pairing of CHF, AUD, CAD & NZD, spreads often widen beyond what we consider as the normal range in few seconds to the news release and then retract back. This calls for wisdom, and good skills to control and take advantage of it.
We decided to state a few important info about the basics before looking at the tools because the basics acts as a solid foundation which will make you enjoy full benefits of the essential tools.
You might be wondering why the EAs and Indicators didn't come up as the first essential tool. Without the news feed systems EAs or manual news trading systems are useless. Infact news feeds are a crucial feature in automated news trading system. So what's the ideal tool for this? They must be fast, lightweight, possibly affordable, portable, & accessible with ease.
FXPulse4: This FREE utility eases the monitoring of news release outcome directly on your chart. You do not need to flip back & forth from your platform and browser to see the actual figures for the news release as it comes directly on your chart. The utility can be customized to suit all kinds of events. Download: FXPulse 4.0
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| FXPulse 4.0 |
NewsCal Indicator: It's a FREE lightweight mini indicator with an event calendar that can be customized to suit every need. It's fast and pulls data from Forexfactory right into your chart. An interesting feature is the alarm system which informs you of an incoming news event. It's part of my news trading arsenal and its been very helpful to me.
Dynamic Support & Resistance Tools
I talked more on this tool in our series of How I Trade The News. This tool (indicator) is very intelligent as it dynamically recalculates the support and resistance of price (highs & lows) within intervals and draws the resistance and support lines on the chart. This helps in placing pending orders, knowing actual areas to set stop loss, and likely areas where whipsaws (fast or irrational up & down movement in seconds) would occur prior to and during news release. This tool makes manual news trading and straddling very easy for me.
NB: A combination of the newscal indicator, S-R indicators and others can be found in the Part 2 series of How I Trade The News
Tool No 2. [Expert Advisers]
Apparently some developers have been able to design clever, dynamic (full auto & manual), and intelligent EAs that trade the news efficiently. Quantina Intelligence Ltd - Research Labs is one of them. They are dedicated to research work on automated news trading strategies. Here are some of the essential news trading EAs from them.
Full Fledged EAs (Set & Run)
Quantina Forex News Trader EA 2015 ULTIMATE v3.1 (Automated-and-Manual Trade)
This EA has been confirmed as a "Plug & Earn" fully
automated Forex robot. It has the capacity to download Economic Calendars, which are filtered automatically, choosing the best possible currency pairs and trading automatically in the background to reduce internet usage. According to the developers, the EA is able to achieve about 82-90% consistency success in Forex news trading. Personally from my experience its one of the best News Straddling Software. However a notable issue with users is getting the right optimized settings. There is a special settings pack available at a small price. It's the same settings pack used by the developers.
Quantina Straddle Trader EA 2016 - (With Latency Meter)
This is another essential tool for news traders who love to straddle before economic news is released. I have received lots of request on straddling news trading systems due to its fantastic way of making profits from news trading.
Straddling means placing two pending orders before economic news is released, a buy-stop and a sell-stop. The essence of this is to set a trap to capture market moves after a news release, which may go either way
If the news release comes out bullish, a bullish spike would trigger the buy-stop order and hopefully the trader will make some money. The same applies to bearish spikes. So with straddling, direction of a news release is not so important and not relevant. The EA takes care of all this without your intervention.
A great feature in this EA is the Latency, Spread and Speed Meter, Advanced Break Even Method (Trigger + Lock), and Stealth Mode Function to protect your account. A demo version is also available.
If you wish to go the FREE way then these essential EAs would be useful.
Henry Liu's CNT EA
I really don't know the current performance of this EA. It's quite a useful EA that trades the news automatically but lacks the additional features of very good paid versions. For a low budget trader it's ok to start with. Henry Liu's EA used to be the hype back then but it seems a bit silent now.
Auto Click EAs (FNG)
Honestly based on personal experience I do not recommend auto click news trading systems due to extreme volatility of some events in news trading. For instance there are events that causes huge gaps in splits of seconds due to the severity of the impact, which auto click systems cannot detect or execute. The issues of hangs and platform freezing during news release makes auto click systems inefficient. However there are some FREE auto click systems like FNG that are very good. FNG publishes guides and setups regularly for subscribers.
Tool No 3. [VPS]
The benefit of using a VPS is most often ignored by traders. It is a very handy tool for the following kinds of people:
These are mainly traders who have very busy schedule and therefore do not have the time to adequately monitor news trading events or the events most often clashes with their business schedules which keeps them off their computer.
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| NewsCal Indicator |
Dynamic Support & Resistance Tools
I talked more on this tool in our series of How I Trade The News. This tool (indicator) is very intelligent as it dynamically recalculates the support and resistance of price (highs & lows) within intervals and draws the resistance and support lines on the chart. This helps in placing pending orders, knowing actual areas to set stop loss, and likely areas where whipsaws (fast or irrational up & down movement in seconds) would occur prior to and during news release. This tool makes manual news trading and straddling very easy for me.
NB: A combination of the newscal indicator, S-R indicators and others can be found in the Part 2 series of How I Trade The News
Tool No 2. [Expert Advisers]
Apparently some developers have been able to design clever, dynamic (full auto & manual), and intelligent EAs that trade the news efficiently. Quantina Intelligence Ltd - Research Labs is one of them. They are dedicated to research work on automated news trading strategies. Here are some of the essential news trading EAs from them.
Full Fledged EAs (Set & Run)
Quantina Forex News Trader EA 2015 ULTIMATE v3.1 (Automated-and-Manual Trade)
This EA has been confirmed as a "Plug & Earn" fully
Quantina Straddle Trader EA 2016 - (With Latency Meter)
This is another essential tool for news traders who love to straddle before economic news is released. I have received lots of request on straddling news trading systems due to its fantastic way of making profits from news trading.Straddling means placing two pending orders before economic news is released, a buy-stop and a sell-stop. The essence of this is to set a trap to capture market moves after a news release, which may go either way
If the news release comes out bullish, a bullish spike would trigger the buy-stop order and hopefully the trader will make some money. The same applies to bearish spikes. So with straddling, direction of a news release is not so important and not relevant. The EA takes care of all this without your intervention.
A great feature in this EA is the Latency, Spread and Speed Meter, Advanced Break Even Method (Trigger + Lock), and Stealth Mode Function to protect your account. A demo version is also available.
NB: All products from Quantina Intelligence Ltd. is currently available at a special promo price. See more details or contact us for volume price and better deals.
If you wish to go the FREE way then these essential EAs would be useful.
Henry Liu's CNT EA
I really don't know the current performance of this EA. It's quite a useful EA that trades the news automatically but lacks the additional features of very good paid versions. For a low budget trader it's ok to start with. Henry Liu's EA used to be the hype back then but it seems a bit silent now.
Auto Click EAs (FNG)
Honestly based on personal experience I do not recommend auto click news trading systems due to extreme volatility of some events in news trading. For instance there are events that causes huge gaps in splits of seconds due to the severity of the impact, which auto click systems cannot detect or execute. The issues of hangs and platform freezing during news release makes auto click systems inefficient. However there are some FREE auto click systems like FNG that are very good. FNG publishes guides and setups regularly for subscribers.
Tool No 3. [VPS]
The benefit of using a VPS is most often ignored by traders. It is a very handy tool for the following kinds of people:
These are mainly traders who have very busy schedule and therefore do not have the time to adequately monitor news trading events or the events most often clashes with their business schedules which keeps them off their computer.
Another category of this type are traders we call pure investors. They have little or no knowledge in Forex and hence invest only in EAs, PAMM, or Signal trading systems. It's advisable for traders of these type to deploy their platforms to a reliable VPS where their platform and trading systems would run 24/7 unhindered.
> Traders Who Reside in Unfavourable Geographical Regions
There are some or more important news trade events that are scheduled in times that are not favorable to certain geographic region due to time difference. Well Forex trading is more of a 24/7 market so one should get used to this. However it could be very tiring to be up midnight after a hard days work to keep up an upcoming event. I have most times missed vital events despite depending on my clock alarm to wake me up at such times. So in this case a VPS with an automated trading system would be very handy. See more on Why You Might Need A VPS System & Top 5 Forex VPS Providers - 2016
These are the Three (3) crucial tools and basic needs for successful news trading. If you know any that's not listed here and will be very useful, feel free to share with us.
Wish you a pipful encounter all the way.
Your dear friend in news trading.
These are the Three (3) crucial tools and basic needs for successful news trading. If you know any that's not listed here and will be very useful, feel free to share with us.
Wish you a pipful encounter all the way.
Your dear friend in news trading.
Copyright Image (Mechanic Spanner Toolbox Running Isolated Cartoon) courtesy of vectorolie / FreeDigitalPhotos.net
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