2 questions; how many of these news spikes have you witnessed and how many have you successfully *played*?
I'll bite here. First a little more about the way I trade: I only trade known news events this way and nothing on the fly. News spikes must be minimum 40 pips before I will enter on retracement. Stakes are almost always small....In other words I won't make a killing. Retracement of about 40% of initial spike prior to entry, stop loss is at the price before the spike. Initial target is about 2x the retracement but is managed and I often exit early if price stalls.
If I get stopped out it means price has retraced 100% and is now moving in the opposite direction. Reentry going in the opposite direction immediately with 1.5x initial stake, stoploss 25% of the down spike, target 50% of the downspike. In my own experience whiplash occurs somewhere along the spike, ALMOST NEVER at the original price. NO third entry if stopped out twice.
I have my own self-coded ea that does most of the work but I manange the trade manually.
A rough estimate is about a 55% success rate of profitable trades, however winners are marginally more than losers. I can remember only twice where I lost both the 1st trade and the reentry on the same news event. Luck plays a part as I've managed to manually exit before getting stopped out a few times.
Again, playing with small stakes makes it easier to stomach as it's happening and the ea relieves most of the stress getting the entry and exit right. Finally, IT ISN'T EASY OR FOR ANYONE WITH WEAK STOMACH.
Peter
ADDED: To be fair and to offer a bit of critique on my news trading: Taking into account the small stakes, the marginally larger winners than losers, and the time and effort I put into news trading, I don't really consider this to be much of a success. It began as an experiment. The fact that I can make SOME profit overall out of this feels good, but not really worth all the trouble. And it took a loooong time to get here.
