Richard Hill Forex Net Trap

[Tanguero]

you realise gdp figures are out in 30 mins?

That's my bet. My theory is that the market feels the numbers before they are released (banks employ no worse analysts that those who crunch the official numbers), so 1/2 hour before the release it should be clear how the market is positioned and what the chances are. Just before the release and right after it is too late to me (and I can't do it anyway), most of the time the best opportunity will go by then.

Well, stopped out by a pip (funny, advfn shows the low at 76, a pip above my SL).

 

[Dubai]

That's my bet. My theory is that the market feels the numbers before they are released (banks employ no worse analysts that those who crunch the official numbers), so 1/2 hour before the release it should be clear how the market is positioned and what the chances are. Just before the release and right after it is too late to me (and I can't do it anyway), most of the time the best opportunity will go by then.

Well, stopped out by a pip (funny, advfn shows the low at 76, a pip above my SL).

They have about as much idea as to where the price will go as we do. They don't have a crystal ball.

Trying to second guess the market is a receipe for disaster imo. Trade what you see,not what you think.

 

[gbdru2]

That's my bet. My theory is that the market feels the numbers before they are released (banks employ no worse analysts that those who crunch the official numbers), so 1/2 hour before the release it should be clear how the market is positioned and what the chances are. Just before the release and right after it is too late to me (and I can't do it anyway), most of the time the best opportunity will go by then.

Well, stopped out by a pip (funny, advfn shows the low at 76, a pip above my SL).

if that was the case then there wouldnt be any shocks? If the market 'knows' by 8am etc then why does it react at 8.30.. under your pretext the market should drift towards the adjusted level between 8-8.30...

It'd be great if it did work but I suspect the whole industry around news trading would have died a long time ago if it did

but, it s a good theory, certainly the best we've seen today.. Anyone else got any we can try out (with your own money of course )

 

[Dubai]

I tried using news spike software but encountered three problems:

i) broker wouldn't fill orders
ii) execution time is critical, if slow by 5ms you can miss the trade
iii)Spreads can widen pre news depending on broker

I tried it live for 6 weeks and out of some 25 'triggers' (where deviation from forecast was enough to trigger a trade) I only got 1 fill. That's a crap s/r whatever way you look at it.

It's not cheap software either.

 

[gbdru2]

Trade what you see,not what you think.

Without doubt the best comment of the day.. and most other days as well

 

[Melb]

That's my bet. My theory is that the market feels the numbers before they are released (banks employ no worse analysts that those who crunch the official numbers), so 1/2 hour before the release it should be clear how the market is positioned and what the chances are. Just before the release and right after it is too late to me (and I can't do it anyway), most of the time the best opportunity will go by then.

Well, stopped out by a pip (funny, advfn shows the low at 76, a pip above my SL).

The only time the market 'feels the numbers' is when there is a data leak - this does happen from time to time and doubtless there will be some who insider trade... But we all know where that ends up! So those on the inside that have prior knowledge and decide to trade this are risking their career and their freedom - only a matter of time before they are caught...

There is generally a frantic trading frenzy a few seconds before release by those who think they may know the news outcome but the fact is that the sudden large spike at the point of news release is caused by a deviation of the expected news (as forecast by so called experts - banks, media pundits etc) and the actual news results... The market has already settled to a level that incorporates the expected result so when that is different from the actual result (+ve deviation the market rises, -ve deviation the market falls) is when we see the market correct to the new 'actual' level...

 

[peterf1966]

Can anyone give an ***simple**** explanation on how I can us trailing stiop on IG Platform.

Liek a How to guide

Looked at thier help guide but still a little confused!

Thanks
Thanks

Also before you can do what Mark says, you do have to enable trailing stops - do this from your account settings, to enable trailing stops option.

 

[everydaytrader]

+42 for me today decided to take profit before the London open. Also had my
biggest ever loss on a DEC10 long on cable I took out feeling that we had been in an
uptrend since mid May that would go on to at least test the April highs around the
15500 mark.

 

[everydaytrader]

Trade what you see,not what you think.[/QUOTE]

Should have done this before placing that DEC10 long

 

[thelurker1]

Thanks for this.....

So at 8am if I clicked "50" distance and "10" step.

I would have locked in 20 pips profit and every 10 pip profit would mean mean I bank another 10?

Thanks

Okay I will make it as simple as possible as I too found the IG guide confusing. The simple expalnation is you have two settings, "Distance" and "Step".

"Distance" is the figure you put in you want your stop to be just like a normal NT order. But as it is a "Trailing stop" it keeps that "Distance" from the current price on a gain +/- , but does not drop if the market turns against you. So locks in profits or limits losses.

"step" is like a notch on a one way ratchet. You set this to what you want the market to travel in your favour before before the ratchet clicks up another notch and locks in profit.

For NT orders above +30 pips after 8am I usually set it to "Distance" = 30 , "Step" = 10.

So for example today. Sell 15009. Once it got to say 14975 (+34) if you have set up a trailing stop on my figures above what would happened after you submit ther ammended order would be the stop would have trailed to 30 pips away from the current price (distance), rounded to the nearest 10 pips (step).

So @ +34 pips (14975) it would mean the trailing stop would adjust 30 pips from 15039 (NT) to 15009. This means the trailing stop has now adjusted you lock in break even.

Now once the market moves another 10 pips as it did to 14969 the 10 pip "step" will click up another notch and move the "distance" trailing stop to 30 pips away from 14969 , so it the stop will become 14999.

This means +10 pips is locked in and even if the market completely retraces to a normal NT loss you will get stopped out for +10 pips.

You can obviously set distance and step to what you like subject to lower limits of the trailing stop but remember the lower thay are, the quicker you may get stopped out if the market bounces back before carrying on in your favour.

It's swings and roundabouts. I don't use it to try and lock in profits to the max as you could often get stopped out too early and the nT carrys on to a bigger win.

I use mine to ensure that after 8am, if we are above +30 I can't go to a loss in the last 1/2 hour and could at least also lock in 10 pips, or hit the max 50 pips.

M

 

[mark120169]

+42 for me today took decided to take profit before the London open. Also had my
biggest ever loss on a DEC10 long on cable I took out feeling that we had been in an
uptrend since mid May that would go on to at least test the April highs around the
1500 mark.

Don't you mean April highs of 15500ish ?

I lost a few hundred quid in May just after starting thinking it was a cool idea to take a 6month short position on the Euro / USD. Had 100 pip stop from entry and the Euro news was well bearish and we where losing loads on NT due to the Euro dropping.

Once it got to June and the Greek / PIGGS news died down the Euro bounced back and I got stopped out. Decided after that the 6 month positions on Forex was way beyond me a nd a true gamble, like a coin toss so did not do anymore.

However the idea of 6 month positions on things like shares which I understand better and have traded successfully since 07 (made £11k off £5k) sparkled my interest.

Took one Dec 10 long on BP when it was @ 500 stop 475. Got taken out. So decided to wait, took another @ 375 with 100 pip stop then saw to my horror it kept dropping and dropping. Once the news about the temp cap being successful came out in early June thought ok it will rise now and tried to take a second long with a 100 pip stop @ 340 but the market spiked on the monday and it got placed @ 363.

Then Obahma and the Yanks started really sticking it you BP and it dropped again to 300p. I was sweating but thought 300p must be a barrier.

When it rose and steadied above 300p took a third Dec 10 long @ 319pwith a 50 stop.

All three now in profit and i hope BP may be back to 450p by december or better.

This I am comfortable with as I feel I know shares much better. I also have a mate of a mate who is a oil trader for BP and he was not worried about the situation as he said BP has $1 trillion of assets.

M

 

[mark120169]

Thanks for this.....

So at 8am if I clicked "50" distance and "10" step.

I would have locked in 20 pips profit and every 10 pip profit would mean mean I bank another 10?

Thanks

No. If you set distance to "50" when the market is +30 you will only lower your default NT stop by 10 pips to -20.

Think of it as this. As you set a normal NT stop of -30, if the market reaches +30 @ 8am you have a stop travel "distance" of 60 pips the market can retrace before you get stopped out.

If you set distance to 50 step 10 what will happen is your stop will move 50 pips away from the +30 figure, which is -20. And if the market reaches +40 it will adjust up to 50 pips away from +40 so -10.

If it hits the 50 pips limit as you bank the stop will have moved to 50 pips distance from +50, so breakeven.

IMHO a +50 distance is not worth using unless you want to remove the +50 limit and let a trade run after 8.30. But then the market will have to reach +100 before you are locked in to the same profit you would have had if you had took the 50 pip limit on normal NT.

My advice is don't use trailing stops until just before or after 8am if you are @ +30. Then if the FTSE goes against us it can limit losses / lock in profits, if it goes with us it would be unusual for the market to then retrace 30 pips before banking +50 or reaching 8.30 manual close.

NT banks well as it is and often enough. Think of the trailing stop as an anti loss insurance if youy are in good profit after 8am when you only have 1/2 hr to recover a loss if the market turns against you.

It should be used as a loss limit tool not a banking gaurentee tool.

M

 

[everydaytrader]

Don't you mean April highs of 15500ish ?

I lost a few hundred quid in May just after starting thinking it was a cool idea to take a 6month short position on the Euro / USD. Had 100 pip stop from entry and the Euro news was well bearish and we where losing loads on NT due to the Euro dropping.

Once it got to June and the Greek / PIGGS news died down the Euro bounced back and I got stopped out. Decided after that the 6 month positions on Forex was way beyond me a nd a true gamble, like a coin toss so did not do anymore.

However the idea of 6 month positions on things like shares which I understand better and have traded successfully since 07 (made £11k off £5k) sparkled my interest.

To one Dec 10 long on BP when it was @ 500 stop 475. Got taken out. So decided to wait, took another @ 375 with 100 pip stop then saw to my horror it kept dropping and dropping. Once the news about the temp cap being successful came out in early June thought ok it will rise now and tried rotake a second long with a 100 pip stop @ 340 but the market spiked on the monday and it got placed @ 363.

Then Obahma and the Yanks started really sticking it you BP and it dropped again to 300p. I was sweating but thought 300p must be a barrier.

When it rose and steadied above 300p took a third Dec 10 long @ 319pwith a 50 stop.

All three now in profit and i hope BP may be back to 450p by december or better.

This I am comfortable with as I feel I know shares much better. I also have a mate of a mate who is a oil trader for BP and he was not worried about the situation as he said BP has $1 trillion of assets.

M

Yes I meant 15500.

Certainly agree with your comments about taking long term positions on forex now, the
market can move so far either way its difficult to know what size stop to use. You could
ultimately be proved right but get stopped out along the way or give it loads of room get
it wrong and face a huge loss. Would be interesting to know what stops traders who do
trade these long term positions use.

 

[mark120169]

Thanks for this.....

So at 8am if I clicked "50" distance and "10" step.

I would have locked in 20 pips profit and every 10 pip profit would mean mean I bank another 10?

Thanks

If the market is +30 @ 8am to acheive the above you will have to set distance 10 , step 10.

Then it will adjust to lock in +20 and as long as the market doesn't retrace from +30 to +20 then yes each time it moves 10 pips you will lock in another +10 pips.

But again IMHO you have a very high chance of being stopped out for +20 diing this and often the market will then move on the +35, +40. +50.

Don't try and use a trailing stop as a banking tool. Use TNT via MNT or INT for that. Use trailing stop as a loss limit tool for you NT trade.

Think of it as this. Say you do a TNT50/50. 50% NT, 50% INT.

Market gets to +35 at 8am and INT has banked locking in profit. You set trailing stop Distance 30 step 10. by 8.10am market is +41 so trailing stop has locked in +10 on your NT trade. Then the bears come out to play and the DOW / FTSE all tank draggin cable with it and come 8.30 NT would be @ -15 pips or somethin from +41.

No worries for you. INT banked +25 and NT with trailing stop banked +10. Scalled as TNT 50/50 you have +35 / 2 = +17.5 pips but if you had ne Vanilla NT you would be -15 pips.

And this situation above has happen in the last 8 weeks. How do you think many on here are doing much better than RH results recently.

Long term who knows. Even using trailing stop on Vanilla NT arounf 8am above +30 will more often than not give better long term NT results IMHO.

M

 

[Tenapenny]

Yes I meant 15500.

Certainly agree with your comments about taking long term positions on forex now, the
market can move so far either way its difficult to know what size stop to use, You could
ultimately be proved right but get stopped out along the way or give it loads of room get
it wrong and face a huge loss. Would be interesting to know what stops traders who do trade these long term positions use.

Same mm as intra-day for me, 2% of whichever account I'm using. E.G. 10k account risk is 200 pips then £1 a pip etc.

 

[everydaytrader]

Same mm as intra-day for me, 2% of whichever account I'm using. E.G. 10k account risk is 200 pips then £1 a pip etc.

I have to admit to ignoring my normal mm rules for this trade, a painful lesson.

 

[Tanguero]

They have about as much idea as to where the price will go as we do. They don't have a crystal ball.

Trying to second guess the market is a receipe for disaster imo. Trade what you see,not what you think.

If I see a setup before a release I take it. This makes my judgment whether the market is pre-set to certain numbers. In fact, 1/2 hour before an important release is a good time to check whether there is one at hand - quite often the release then fuels it to the more ambitious target levels.

Today was not a good example probably - was trying to ride a correction. Still, such punts have a good RR ratio, so worth trying anyway.

 

[piphead]

Well done to those who stayed in!!
Has anyone tried the trap on other markets???
EUR/USD for example??

 

[Trader333]

Imagine a software that can place a buy/sell trade within milliseconds of major news releases... You would be pretty much guaranteed to get on the right side of the news trade at an entry close to the beginning of the move... Well such software does exist... Oracle Trader being one... This software does threaten sb firms profits because they cannot hedge against this quickly enough and it is likely that 50p stakes compound very quickly into something much higher

It may work with DMA but is less likely to with a SB company. I looked into software that can do this and it was not consistent enough even though it placed orders more quickly than anyone else. Also if this started to impact SB companies significantly do you really think they would sit back and just let it happen ? Of course not they will either delay an order (which would only need to be a 1 second delay) or widen the spread so much that making quick profits would be difficult.

There are ways to trade news but this is not one of them in my view

even with other brokers I have not experienced any slippage. Only IG is the problem. Once the traders shift away from them in hordes.. they'll get the message, I hope.

This is not going to happen, IG are the biggest SB company and getting bigger all the time. Not everyone is a day trader and as such slippage is not an issue. I and many others I know use IG and have no intention of moving away from them.


Paul

 

[mark120169]

It may work with DMA but is less likely to with a SB company. I looked into software that can do this and it was not consistent enough even though it placed orders more quickly than anyone else. Also if this started to impact SB companies significantly do you really think they would sit back and just let it happen ? Of course not they will either delay an order (which would only need to be a 1 second delay) or widen the spread so much that making quick profits would be difficult.

There are ways to trade news but this is not one of them in my view



This is not going to happen, IG are the biggest SB company and getting bigger all the time. Not everyone is a day trader and as such slippage is not an issue. I and many others I know use IG and have no intention of moving away from them.


Paul

What are the next two biggest / best SB companies? CMC markets looks quite slick off their website. Is theirs a good functioning platform? It offers mobile phone dealing like IG too and same 3 pip spread on cable.

Not having to close on a mobile now some time this kiddies School Holidays I will try Capital Spreads too as I like the idea of the 2 pip cable spread. Could really help out especially if they have no slippage too.

Anyone know any other SB companies with 2 pip or lower cable spreads?

M