STRADDLES ON NEWS
The following technique was imparted to me by Michael Stewart and I have only started testing it using quite decent results. It was evident from reviewing his real, personal account he uses it together with frequency himself.
Employing the free Global Economic Calendar from Daily FX at http://www.dailyfx.com/ (click on the ”Calendar” tab in the top and when you get to that page, which is an American occasions calendar just, immediately to the left of the you may see the words International Economic Calendar, click on these which will take you to the current economic calendar), you select the bolded events to the day time and states of interest to you. It is also highly probable that our very own superb economic calendar will serve well for this particular purpose, and, honestly, it was for this very reason that I went searching for this a calendar and that's how I found my way for this website in the first loion.
Employing the 14 pub ATR plus or minus a couple of pips off the 15 minute, 30 minute or 1 hour charts, you decide on a straddle about five minutes prior to the scheduled event utilizing a 60 pip limit along with a 30 pip stop loss. If the chart moves in response to this news in either direction, one leg of your straddle will activate. Contrary to the NFP, which shows instant, explosive motion a massive majority of the time, these motions may take hours. The drama is fully automated once you set your straddle, so all you have to do is check the chart some hours later. If the chart is in profit but has not restricted out within 24 hours, I believe the better part of wisdom would be to shut the transaction and choose your profit straight there.
Once the play functions properly, you tote a 60 pip winner with minimum effort and Mike said with pretty great consequences. The 4X is very sensitive to those scheduled news announcements and the Japanese Yen seems as it works well for this play. I'm sure some charts are better than others and some news events more probable than other people to produce fantastic results but only field experience will demone that.
The major issue isn't to set your straddle too tight. As you don't have any doubt noticed, frequently a huge spike in the two directions will accompany a news announcement. Whether that is the professionals manipulating large amounts of cash to take out improvidently placed stops and activate improvidently placed straddle entries or even some broker shenanigans, I have not the foggiest. All I understand is that the phenomenon is really consistent. If you set your straddle too tight, the two legs will activate and one leg will stop out using a 30 pip reduction, and, if the other limits out, your profit on the drama will be just 30 pips.
Mike uses the 14 pub ATR because he said it was his experience that banks and other large institutions favor that period for its calculation in order to set entry orders for their very own automated reversal progr developed to hedge them from large losses. The default period on many charting appliions for calculating the ATR is 7 bars, however all of them, I'm sure, permit you to set your personal period.
I recommend strongly you examine any methodology at a demonion first before risking real money. This is just prudent. And if you do field test it, then I would love any feedback you care to provide on your own experience and suggestions for optimizing the drama.
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