Deviations and news

#1

I would like to get more into news/ earnings reports etc straddle trading and would like to know how you determine which option to buy/sell shortly before the news event.

#2

1) Use this helpful links - calendar a above to find the news events http://apexinvesting.net/forex-news-calender-a/ “http://apexinvesting.net/forex-news-calender-a/”

2) Find events that have a high impact - ideally multiple releases at once

3) This helps you then focus in on the currency pair/s to trade

4) Do homework - look back over the past years reports. (use history link when you expand the report) Most people are tempted to skip this step and go to step 5. If you are serious about trading and consistent income then take the time to do this step.

Note: Where expectations met, exceeded, missed Where result better/same/worse as last report Where results better/same/worse as 1 year previous Did they revise previous results up/down

Was their more than one report released that day at the same time or shortly therafter on the same currency?

What was the reaction based on the above… immediate big move… slow move but moved with news (ie good for currency that currency went up - note this means if something is good for say CAD that USD/CAD went down)… quick move, pulled back…then trended back up (when it trended back up did it stop at the high/low from the initial spike from the news (high/low since news came out) or did it keep going quite a bit more?

How far did it go up/down after news (track through 3 PM ET) (Ninja can load a ton of data on intraday format)

Do this for reach release over past 12 months.

This takes time but if you do it daily on the high impact reports over a period of 3 months you will have a trading arsenal to use year around. Each time you place a trade update the notes.

This will give you confidence in the trade and you you know how to execute it based on what comes out. Also you will know the report backwards and forwards.

5) If the news is good then pick the diagnostic deviation levels and buy the strike at the next level - get in and get out when it hits it - looking for a 1:1 looking to enter for around 20 and out for around $43 on a long trade - on a short trade looking to get in around 80 and out around 57. Note doing the homework will let you know if you should look at .5, .7, 1, 2, 3, etc… deviations

Also we do some of these in the P3 Sigals where i have already done the research.

#3

Thanks for the detailed explaination Darrell. I have been news trading in Forex for a while now and am coming to find that the strangle trades here in the Options market gives me a much better risk managment doing the news. My risk is firmly established here where I can only guess what my pip loss may be with slippage and not getting filled or exited on the spike, etc. doing Straddle trades in forex.

PS Had great EURUSD trade today closing two contracts I purchased yesterday for total of $18 and profited with $196 on the close. Just getting my feet wet but I think your service and NADEX is a great combination. Thanks for all the help.

#4

you bet and that is awesome!

Also i am working with Benzinga to make a whole new forex calander… I think their IT staff is already cringing at the specs i have given them…have absolutely no ETA but when done the fx calander will do all the research for you like what i teach on night/morning trading with fx - should really help a lot… I have done it a long time without it so not necessary but i have found as i repeat things over and over its time to get it automated :slight_smile:

AWESOME TRADE!!!

You using the deviations to help with the news?..they help me a ton.

#5

I have not used the deviation level as of yet for trading the news in the options market. I have been using another software program designed specifically to do straddle trades in the forex market on the news spikes with a trailing stop setting and several other news specific settings. I am looking forward to doing more news trades here in NADEX Options market and will be using the deviations chart.

That FX calendar sounds fantastic!! Your right that I can do the research myself but to see it all in one place would be a great time saver.

#6

Regarding the homework, Does NINJA allow me to see trade data from a year ago? That might be a good training video to show people how to do that, You have mentioned on several videos about doing this type of research, it would be nice to see how you go about getting previous news graph data with the effects of the news. I know I can bring up the history but, it would be great if you can add a feature that brings up the graph also for that time period.

Also, if I look at your spread numbers for your butterfly trade suggestions (before the news) and compare the same news event between two months, I notice that the spead values for the currency pairs are not close to one another. How do you come up with your butterfly spread values? They don’t seem like that they are an “average” over previous news affects. If you did an avergage, I expect the monthly spread values to be prettly close to the previous month’s numbers.

One more thing, how quickly does apexinvesting update the website with news results. I’m talking about whether the actual numbers came in as expected/ higher than expected or lower than expected numbers. It is within seconds, minutes, 5 minutes,…?