How I Trade The News (Tools, Setup, Source) - Part 2

In the previous part i outlined some basic facts about News Trading, and the major currencies/investments that attracts investors, which drives the market.

This section reveals step by step guide on how i trade the news with sample illustrations. The first step is the introduction of some vital materials i use.

1st Step: Setup Materials
The charts below illustrates some tools i used to setup my chart to get prepared for news release.

 Click image to enlarge...

 Click image to enlarge...

The 1st picture shows a sample of my chart setup containing some tools that alerts me when a news is about to be released at a specified time configured by me. It also keeps me informed of upcoming and past news events. The setup also contains a dynamic Support & Resistance Indicator as well as a dynamic Pivot Point, which acts as a guide to help me study the psychology of the market and to locate the best places to place orders. The One Click Trading

One Click Trading

tool is also part of the chart setup. I use it to place quick order(s) during a quick counter retracement or to trade spike trade reversals.

Download My Trade Setup Indicators Here: https://docs.google.com/uc?export=download&id=0B2cGd02M-NmRV3ZBckc5ajdjVEE





The 2nd chart is a little different from the the 1st chart only for the news economic tool which displays the actual release on the chart. However the release is not as fast as other 3rd party news engine sources, so i rarely use it.

Other important resources:
1. Forex Factory
2. My personal News Calender on my blog.
3. Henry Liu's pre-news analysis
4. News Trading EAs (I seldom use them)
5. Cable/Satelite Network (for live speeches, press release, interviews, e.t.c.)

2nd Step: Get Pre-News Release Schedule 
I get this weekly from several sources to get me prepared adequately. When reviewing the news calendar or schedule for the week I put more interest on the impact and the time schedule. Getting this information on a Sunday before the beginning of the working week is the best. It helps me to plan adequately for the week or days ahead most especially for midnight news release due to my geographic location.

Apparently there are far lesser economic activities on Sundays around the World except in some Asian Markets.

Lookout for daily analysis of the news release hours or if possible a day before. Henry Liu's pre news analysis is one of the best i can recommend. Apart from analyzing the expectations of the news release, they offer trade guidelines on the best pairs to trade.   

High impact news are the best to trade. However their impact is still subject to amount of data released. So not all of them could be profitable. Therefore take the advise or guidelines of pre-news analysis from experts seriously.

3rd Step: Watch For Signs Prior To The News Release
Watch out for certain market signs that indicates the likeliness of a possible high impact or apparent closeness to a news release. See some of the signs below:

- Narrow price movement extending for hours before the news release.

 

- Pre-news reaction. In some cases there is a slight or consistent push in the market arising from traders sentiments towards the expected outcome of the news release. Be very careful with this sign. It's most often seen with an engulfing candle pattern.

- A very slow or an abrupt halt in the market movement. It is what i call the market quiet time. This sign means the market participants (i.e. bulls/bears) are waiting earnestly or holding back for an important information, which would decide the long or short term direction of the market. It's one of the major positive sign of an upcoming news release with a very high impact. This sign helps me to detect which pairs are likely going to have a greater impact.

- Inconsistent and continuous series of candle patterns (doji's, hammers, inverted hammers, kickers, e.t.c.). The inconsistent candle patterns is a display of the irrational reaction of the market to an upcoming news release.

 

4th Step: Place Orders
This should be done systematically. You need to understand the signs, and market behavior before placing orders. There are cases where your orders would be triggered at the wrong time due to what i call tremor of the market (i.e. mini shocks before the real impact). So placing of orders is a dynamic thing. It might require constant modification until the news release.

News release accounts for a higher percentage of market volatility, and hence can cause irrational price feed lags, which results to error messages such as "Trade Context Busy", "Invalid SL/TP", "Requote", platform hang, e.t.c. More often traders blame their brokers for this but it is not entirely their fault. The steps presented here reveals a way out of this problem.

In the final part we will learn which pairs are the best to trade for a particular news release, and how to place orders and manage them.

Meanwhile i recommend looking up on our article: Forex Currency Pairs & How They Relate.

Watch out for Part 3.

Image (News Dice) courtesy of Stuart Miles / FreeDigitalPhotos.net

How I Trade The News - Part 1

Image courtesy of [Stuart Miles] / FreeDigitalPhotos.net

News trading accounts for more of the huge success I have achieved in Forex Trading. I want to share with you my personal news trading strategy, which got me over 78 win trades, and about 26 loss trades since April 2014 till date. The money management made the bad trades highly insignificant when compared to the overall account equity and balance.

An infallible fact is that news trading is one of the highly profitable trading methods in Forex. It is precise and most times have a definite outcome because of the fundamental factors involved. However it is not that easy, hence a good deal of experience, and broad knowledge of the economic and political events in the world is necessary.

In my early years in Forex, i was quite glued to the technical way of trading. My first live account got burnt through the effects of an economic news release. At that time i was ignorantly trading during the news release, and in less than few seconds i got a margin call. I never knew at first that i was exposed to the swift impact of the news release.

News release most often comes with great volatility enough to drain an unprotected account. Brokers tend to widen their spreads at such times thereby compounding the effects. (In subsequent chapters i will share some tools to help you get prepared adequately for the news release).

I am not about to reinvent the wheel on news trading but to share with you my personal method, which i have been successfully using to trade the news. But before this is revealed, its important we understand some few basics and facts about news trading especially for those who do not have any knowledge on this subject.  

 

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Some Basics & Facts

• Forex in the real sense is not just buying and selling of currencies. There is something that drives the appetite to buy or sell a currency.

• Financial investors invest only in areas where they expect high returns. The choice of investment is determined by the economic performance, and strategic financial programmes of a country. The economic performance or financial statistics are released periodically. These figures serves as a guide to investors. 

• Real investors invest in the commodity (tangible & intangible) of a country, which in-turn affects the currency positively or negatively. This is reflected in the price of the currency being bought or sold by the Forex traders.

• Investors watch out closely for the outcome of economic news release. A good release would spur investments (BUY) and a bad release will cause withdrawal of investments (SELL). This is a simple way to define fundamentals in Forex.

• The effects of these fundamentals in Forex is what drives the market. It is like the fuel a vehicle needs to move. Ordinarily the market would still move but the fundamentals has the capacity to change its course, and most often sends it wild.

• There is bound to be an economic news release every week. See economic news calendar

• News trading can be discomforting due to time factors. I am most often fortunate to trade the US & UK news release due to my geographic location. However i find it difficult to trade Australia, New Zealand, Asia & some other country's news release because it sometimes comes out at midnight in my location. 

• Technical tools and strategies are most often useless or fails during a high or medium impact economic news release.

• There is a high probability of spread widening by brokers during news release. So not all brokers are good to trade the news.

• A very high impact news release can cause extreme movement of price (spikes) in nanoseconds faster than the eyes can see.

• Most sideways movement and narrow movements usually occur as a sign of an upcomming news release.

• Do not expect the best from your broker during news release. Prepare for unlikely mishaps, and unprecedented issues due to sever overload, and heavy request from data feeds. This often is responsible for error messages like "off quotes", "Invalid SL/TP", "Trade
  

  

  Automated News Trading System

  Timeouts", "Trade Context Busy", e.t.c. (My strategy takes care of this).

• There is no Holy-Grail system to trade the news. However some systems have shown proven performance trading the news.

Major Currencies/Investments That Attracts Investors

We could refer this to the major news trading currencies. 

Major Trading Currencies:

United States of America (USD), United Kingdom (GBP), Japan (Yen), German (EUR) France (CHF), Canada (CAD), Austrialia (AUD)

Major Investments/Commodities (Tangible & Intangible):

Housing, Food, Energy, Fuel, Mining, Jobs, Sales, Manufacturing, Production, Services, Bank Rates, e.t.c.

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In the next chapter we'll reveal the necessary resources required for news trading. Meanwhile go through your charts and look out for areas where you can spot a spike. Study the chart pattern before it occurred and the reactions that followed.

Happy Trading. 

Top 8 News Trading EA & Software Applications

Latest Update: 25th April, 2016 (NB: The ranking has been updated to reflect the current performance of news trading EAs & systems. Two new products has been added to the ranking list.)
Forex News Trading accounts for one of the most profitable trading methods in Forex due to its precise, and near definite outcome. An unquestionable fact is that it is the fundamentals that drives the market, e.g Jan 2015 Swiss Franc Cap-off Episode. The huge prospect for additional gains in news trading has ushered in special news trading applications with fantastic trade logic that enables semi-automatic and full-automatic news trading systems. This article reveals the NEW Top 8 News Trading Systems (EAs & Applications) in the Forex Market.
 

NB: We conducted deep investigation into some of these News Trading Systems and took into consideration; speed, accuracy, profitability, proven performance track records, and affordability as part of the rating criteria.

This article does not serve as a recommendation to purchase any of the news trading systems listed here. Past performance is not indicative of future results. Please see our risk disclaimer notice, and be guided.

TOP 8 NEWS TRADING EA & SOFTWARE APPLICATION

Top #1. Quantina Forex News Trader EA 2015 Ultimate v3.1 (Automated & Manual)

New Updates: No new updates since the release of this EA, except for special settings pack designed to optimize more profits.

The Quantina Intelligence News Trader was developed by the "Quantina Intelligence Ltd./Forex Research Lab. The EA, which has been successful since its launch is fast gaining huge reputation for itself, and is also becoming very famous in the world of Forex news trading.

The latest version comes with better functionality and better returns for subscribers. The Lite version has been removed by the developers with its features collapsed into the Ultimate Version.

Features (**added functionality v.3.1)

• ** Automated Major Currency Selection


• ** Runs on one chart - No need to open multiple charts


• ** Faster execution - Reduced internet usage


• ** Simplified settings - More easier to use with
  reduced input list.


• ** ECN/STP enabled


• ** Spread tracking/Trade Management system: After trade is triggered, EA automatically tracks it calculating with actual spread and slips (version 2015 v3.1 and above) and setting the Safety Net to the first profitable position (BreakEvenPips). 


• ** Downloadable multiple trading strategies (set files)


• Advanced Forex News Filter - You can filter the news events by Country and/or News Importance.

• Automatic News Event Download - You do not need to search news events on many Economic Calendar around the internet. There is an in-built automatic news search into the EA and it can set itself (News Event Date, and Time) automatically.

• Profit Protection System - If the market is turned back before you reach the Take-Profit value, the EA can recognize that and close the position at positive profit.

• High Spread Protection System - To protect accounts from brokers that hunts stop loss.

• Advanced Money Management System & 100% Automated

Platform:        All MT4 Accounts
Broker:           All Brokers (*Recommended Broker - HotForex & Pepperstone)
News Source:  Built-In & Server based
Mode:              Automatic & Manual
VPS:                Yes (see VPS Recommendation)
License:          £-Paid
Reward Point: Yes 
More Info:       Visit Website

License:

v3.1 Automated & Manual (£190.00)

v3.1 Automated & Manual (£29.00)

Promotional offers are still available for a limited time. For more information  click here: Quantina News Trader EA 2015 Promotional Offer

Top #2. CNT (Currency News Trading) EA

This is one of the best FREE News Trading EA developed by a prolific Forex Trader (Henry Liu) the founder of Currency News Trading.com, News Profiteer.com, and Mastermind Mentoring System. However we still cannot fully ascertain the statistic of its usage presently. 

CNT EA downloads the weekly calendar from Henry Liu's source server automatically, then places 2 trades by selecting the best currency pairs to trade with just seconds before the news schedule, effectively straddling the market in order to capture the entire move during high impact news.

Features

• 100% Automatic

• Integrated Currency Strength Meter - This is the core platform that helps decide which currency is best to trade with in relation to the expected news outcome.

• A standard performance page showing broker by broker performance of the EA. This helps to decide which broker is more news friendly.

• Trailing Stop Functions

• Ability to exclude pairs

• Adjustable account management and fixed lot size

Platform:       All MT4 Accounts

Broker:          All Brokers - See broker performance

News Source: From source server

Mode:             EA

VPS:               Yes

License:   FREE (Requires registration for license authentication) 
Reward Point: No
More Info:      Visit Website 

The CNT EA is rated 2nd due to its design, free cost, and direct support from its renowned developer, who is highly respected in the Forex industry. A news trading room is also available for traders who wishes to have live and direct trading experience during news release.

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Top #3. Quantina After News Trader EA 2016

The makers of the renowed Quantina News Trader Ultimate EA came out with an interesting news trading expert advisor which caught our attention due to its unique features. The Quantina After News Trader EA 2016 which ranks 3rd on our list performs exactly what the name stands for. 

How It Works
After news release and impact, the EA will wait until the end of the timeframe before it enters the market. The EA observes the candle of a scheduled news event and open trades in the same and/or opposite trend direction beginning of the very next candle. Depending on the size of impact and direction, it will track and secure your executed order with BreakEven method and Trailing Stop as usual in Quantina Expert Advisors.

News event at 15:00 server time
Observed candle was a Bearish candle; in that case, the EA opened a Sell (short) trade at the next candle at 16:00. (TimeFrame is H1). Then closed the trade using Break Even and Trailing Stop method with some profit

The EA utilizes a revolutionary trading strategy during news event time, trading just a few minutes after the news data is released, as it opens trades 1 Minute to 1 Hour later after the economic news data is released. This protects your trades from high spread or huge slippage and also latency issues.

One observable action that occurs in most news release is price/market reversion. This is very common and this is where the EA takes advantage by getting into the market at such times. A combination of the Quantina News Trader Ultimate EA & the After News Trader EA gives you a better chance at both sides of the event. 

Example of an Opposite Trade direction Screenshot: EUR/USD H1 
News Event: Medium Impact at 07:15a.m. (server time)
Opposite Trade Direction = true
Observed Candle was Bullish. In that case EA will open an opposite trade direction = Sell (short) trade instead of buy trade. Opposite trade direction is recommended for medium impact of news events.

Features

1. 4/5 digit platform supported automatically
2. Real ECN / STP account type compatible
3. Latest MT4 build 950+ compatible
4. Advanced Break Even Method (Trigger + Lock)
5. Opposite Trade Direction for medium impacts
6. Trail before break even available
7. Separated Buy and Sell Order Distance
8. Intelligent Money Manager (Calculated with Stop-Loss)
9. High Spread Protection
10. Settings can be used in PIPS or in Points
11. Stealth Mode Function to protect your account

Platform:       All MT4 Accounts

Broker:         All Brokers (*Recommended Broker - HotForex & Pepperstone)

News Source: From source server

Mode:            EA

VPS:              Yes

Price:            £90.00
Reward Point: Yes
More Info:      Visit Website 

Promotional offers are available for a limited time. Contact us

Top #4. Quantina Straddle Trader EA 2016

Coming on the 4th spot is Quantina Straddle Trader EA - another product from the makers of Quantina News Trader Ultimate EA. 

The Quantina Straddle Trader EA uses a unique trading method based on every single tick to check every single price movements on the market without bothering your broker server. In less than 1 second over 20 ticks data can be received from your Broker. With this method Quantina Straddle trading expert advisor can be the most precise and highly accurate trading system in your side.

How It Works
The EA sets two opposite direction of pending orders just a few minutes before the news released. (BuyStop & SellStop)

When the market reacts to the news release, and moves in the direction of the impact either long or short, one of the pending orders get triggered. The EA tracks, and secure the executed order with BreakEven Method and Trailing Stop to win a few pips profit.

Features

1. Latency-, Spread and Speed Meter​
2. Unique Algorithm for Pending Orders

3. Advanced Break Even Method (Trigger + Lock)
4. Separated Buy and Sell Order Distance   

5. Settings are in PIPS or in Points

6. Stealth Mode Function to protect your account

7. 4-5 digit platform supported and determined automatically

8. Real ECN / STP account type compatible

9. MT4 build 910+ full compatible
10. Possible to trail before break even

11. Intelligent Money Manager (Calculated with Stop-Loss)

12. High Spread Protection System

Platform:       All MT4 Accounts

Broker:         All Brokers (*Recommended Broker - HotForex & Pepperstone)

News Source: From source server

Mode:            EA

VPS:              Yes

Price:            £19.00
Reward Point: Yes
More Info:      Visit Website 

Promotional offers are available for a limited time. Contact us

Top #5. Secret News Weapon

New updates: No new updates. 

Secret News Weapon makes it easy to capture economic news releases in the format you will find most useful. Whether you prefer to spike trade or after spike trade, either way, this is what you need. It works on nearly all trading platforms and any trade-able instruments that react to economic news such as Forex, FX Futures, Indices, Metals, Oil, e.t.c.

It is one of the most popular auto click news trading software out there that fits its price. It comes in three main versions (Elite, Professional, and Lite), which suits diverse budgets, and experience level.

See a comparison table of the available verisons

		SNW Elite	SNW Professional	**SNW Enterprise
User Level		Intermediate	Beginner	Institutional
Speed		Faster	Fast	Fastest
Spike Trading		Yes	Yes	Yes
Reports per Month		500+	500+	500+
Multi Report Resolution Technology		Yes	No	No
Multilevel Triggers		Yes (3)	Yes (2)	Yes (3)
Mouse Clicks		10	10	10
Multiple Report Visibility		Yes	Yes	Yes
Simultaneous Report Trading		Yes	Yes	Yes
Available Report Data		Forecast, Previous, Actual, Deviation, Revision	Forecast, Previous, Actual, Deviation, Revision	Forecast, Previous,  Actual, Deviation,  Revision
Report Types		Major and Minor	Major and Minor	Major and Minor
Trigger Auto load		Historic Recall	Published Triggers	Historic Recall
Audible Signals		Yes	Yes	Yes
Monthly subscription fee		30 day free trial, $499 a month thereafter	30 day free trial, $299 a month thereafter	$1299 first month $1299 a month thereafter
One-time activation fee		$129	$99	Included

Platform:       All MT4 Accounts

Broker:          All Brokers

News Source: In-Built Calendar, Custom

Mode:            Client App

VPS:               Yes

License:       Paid. 30 Day Trial Evaluation is available for only Professional and Elite versions.

NB: SNW do not offer services to West African Countries. There is a free Signals Services offered by the makers of this product. 

Top #6. FX News Alert V3.0

FX News Alert is a FREE standalone software application that offers signals, currency strength, and news events. It comes in the form of a trading desktop application for Windows, that shows Forex news events, and sounds an alarm for upcoming calendar events. Extra functionality allows you to stream prices from your Metatrader (MT4) terminal, so you can analyse prices using visual tools like support/resistance, heatmaps,  currency strength momentum line graphs or pie charts. 

A news alert widget, which can be used for RSS breaking news feeds or forum posts from Forex Factory is also available .

Features

• Support/Resistance Chart
• Momentum Charts - enables selection of momentum start, so you can see sentiment from day open through to year open.
• Simple graphics user interface
• News Strength Heatmap - widget analyses all the weekly news events and shows which currencies are affected the most.
• Profile Manager
• Supports Binary Options
• Weekend analysis can be done ahead of the market open.
• Screenshots - ability to take a snapshot of your workspace and add annotations to build up a trading journal or share your trading thoughts with clients & friends.

Platform:       All MT4 Accounts

Broker:          All Brokers

News Source: Trading Platform News Feed

Mode:            Desktop App

VPS:               No need

License:         FREE. User authentication is required

Top #7. Beat The News

Beat the News is a client application software that provides you with a multi-platform autoclick system that is integrated with the client software to take less than 1ms between click and click. Think of it like a super fast application that triggers the BUY and SELL buttons at the speed of light thereby giving you the opportunity to trade news spikes.

Features

• Multi-platform auto click in less than 1ms.

• Built-in EA for MT4 - An option of using the client application manually or allowing the EA to handle the trades. The integrated EA for MT4 incorporates the existing algorithmic platform by entering the trading values into your terminals, even before you can see the trading signal.

• Multiple terminals

• Live trading module with suggestions - Included in the client, is a trading module that is available at all times while you are trading. You never lose sight of your work. This module offers pre-set trading suggestions for high-impact events. It can also be configured for any event that interests you. At the time of the release, the system will tell you how to trade.

Platform:     All MT4 Accounts

Broker:        All Brokers

News Source: MT4 News Feed, In-Built

Mode:          Client App & EA

VPS:             Not statediscount

License:       Free BTN Client (requires account registration)

Don't Miss Any News Event - Get Up To 25% Additional Lifetime Discount - Rest While Your EA Works

Top #8. FX Pulse 4.0 *new

New Update: FXPulse 3.0 has been upgraded to version 4.0

FX Pulse 4.0 now comes with better functionality and language support. The indicator is a truly unique economic calendar for Meta Trader 4. It helps you to make more informed and better trading decisions as it provides real time news directly on your chart.

Features

• Displays real time economic news on your chart
• News in your language.
• Fast news stream
• Filters and alerts

Platform:        All MT4 Accounts

Broker:           All Brokers

News Source: In-Built

Mode:             Indicator

VPS:               Not stated

License:         Free 
Download:      FXPulse 4.0

These are the Top 8 News Trading Expert Advisers, and Software Applications you can bet your investments on. While there are other EAs and Client App of this nature out there, these 6 stands out in terms of efficiency, popularity, and productivity.

One perfect news traded successfully is worth the cost. Do not trade the news without any of these.

 

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3. Guide To Selecting A Forex VPS Provider
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