Anyway, NewsTrader V2_3 reads the news events from the weekly XML list kindly supplied by ForexFactory, and issues a very tight straddle just before each medium or high impact event. What's a straddle? It's a BuyStop / SellStop pair that is able to profit from a clean move in either direction. If you look at the forward test, you'll see a number of indications of how this trader works:-
- Large numbers of deleted stop orders. This is when the price didn't immediately react to the news at all.
- Stopped out orders at -10 pips. This is when a spike in one direction preceeds the real direction of the move.
- Closed orders in loss. I have a timestop which from memory closes the orders after about 2 minutes (yes these trades are short!)
- And, wonder of wonders, a number of profitable orders which hit the TP of 10 pips
NewsTrader V2_4
When I first wrote NewsTrader I was trading from my laptop in Australia. I've made other comments about the ping times between Australia and the US: suffice to say the theory of News Trading is greatly undermined by network latency across the Pacific. With the use of my virtual host in New York, I've now reinstated my original code which worked so badly in practice, which was a very tight client-side trailing stoploss. I'm running 4 pips at the moment. You wouldn't believe how long it takes for a MetaTrader 4 terminal in Australia to deliver tick updates and do something trivial like close an order.
So that's it: NewsTrader V2_4 is NewsTrader V2_3 with a trailing stoploss of 4 pips and a takeprofit of 30 pips (which will not normally be hit). It remains to be seen how much better it will work on the faster network. Forward tested here.
When I get a moment I might add auto screendumps of the news events as they occur.
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