I have been trading using this method for several years using only free news sources, with excellent results.
Here are my previous stats for trading the US Nonfarm Payrolls (note: there are interruptions with no trading):
Aug 7, 2009: deviation=78, EUR/JPY +73.6 pips in 30 seconds
Oct 2, 2009: deviation=-88, EUR/JPY +49.8 pips in 30 seconds
Dec 4, 2009: deviation=109, EUR/JPY +57.6 pips in 50 seconds
Jan 8, 2010: deviation=-82, EUR/JPY +80.3 pips in 15 seconds
Jun 4, 2010: deviation=-89, USD/JPY +17 pips in 25 seconds (92.32-92.15)
Aug 6, 2010: deviation=-66, EUR/JPY +27.5 pips in 15 seconds (113.135-112.86)
Sep 3, 2010: deviation=51, EUR/JPY +33.1 pips in 15 seconds (108.735-109.066)
Oct 8, 2010: deviation=-91, EUR/JPY -40.4 pips in <1 minute (114.203-114.607)
Nov 5, 2010: deviation=91, USD/JPY +27.8 pips in 15 seconds (80.989-81.267)
Dec 3, 2010: deviation=-111, USD/JPY +50.6 pips in 15 seconds (83.61-83.104)
Jun 3, 2011: deviation=-111, USD/JPY +19.9 pips in 40 seconds (80.417-80.218)
Jul 8, 2011: deviation=-87, USD/JPY +45.1 pips in 30 seconds (81.359-80.908)
Broker: OANDA (fxTrade platform), real account.
This is for just one economic indicator, there are opportunities (potential trades) about every 1-3 days! Because of high winning ratio of trades and limited losses, rather high leverage can be used and larger than usual positions.
Since the beginning of starting news trading I have substantially improved and redesigned the program. Now you can use it too!
The software has been released on 20/02/2012. Your suggestions are very welcome! Email me
NewsAutoTrader (NAT) is a
Forex news spike trading tool that generates trade signals based on
real-time analysis of live news headlines. Using it you can trade many
economic indicators, such as US Nonfarm Payrolls, GDP, CPI, Retail
Sales, Interest rate announcements, and other news releases that impact
the Forex market. It can be useful for other markets too, such as
Futures and Stock market.
Unlike similar tools that are offered as [expensive] subscription services, NAT is standalone software, it is not a signal service. There are no monthly fees.
What is news spike trading?
Important economic data is usually released to
news agencies from statistical organizations / central banks at predetermined times and consists of one or more numbers (example: the
number of newly created jobs). If the number is considered
important and the actual number deviates enough from what was expected (called a
consensus) by economists and market participants, this usually causes
considerable one directional movements of prices of certain currency pairs, in accordance
with the deviation from consensus number. However, the most price movement usually
happens within a few seconds - there is a price spike. After that period
the price may still go the same direction for a few minutes or more, but
generally the longer the time passes, the more unpredictable becomes the
direction (market stabilizes).
News spike trading is trading these quick price moves caused by news. Trades are usually held from a few seconds to a few minutes.
If you were to trade news spikes manually - read the numbers from news and decide what trade to place, you would likely lose money or make little, because the initial spike can happen very fast, the most of the price move could be already over.
How NewsAutoTrader works?
NAT functions as a news aggregator, processor and autoclicker. It can read news headlines from various news sources, instantly extract the economic indicator values from them by using pattern matching, and according to your defined triggers, automatically open trades in your broker platform by simulating mouse clicks. Almost any broker can be used with NAT, it only needs to execute trades fast enough. Opened trades need to be closed manually (it's a semi-automated system).
There are many MetaTrader 4 (MT4) brokers
that provide free market news in their platforms. Some of them deliver the news
very fast, with little delay (often even before the price spike). NAT is
able to read news headlines from MT4 terminals in real-time and use them for
generating trade signals.
If you have access to other news feeds, they can be also integrated (full version), you are not limited to MT4 news sources.
Using multiple news sources aggregated (combined) into a single stream helps to receive the economic data faster - some news sources sometimes may be faster, some - slower. This allows to use only the fastest news source for generating trade signals.
News headlines are processed by the included scripting engine that extracts economic indicator values by using pattern matching and generates the trade signals (BUY/SELL). Because the headline patterns for specific indicators are usually consistent (depends on news provider), indicator values can be easily extracted.
NAT includes scripts for most tradable US, UK and Canada economic indicators, but you can also write your own scripts or modify the existing scripts. The trade logic, how to interpret the headlines, what patterns to use, is completely customizable.
Trade signals normally are generated by comparing the economic indicator actual and consensus values (their deviation). For example, if the deviation (actual - consensus) is positive and reaches or exceeds some your defined limit (trade trigger), then a BUY signal is generated. If a negative trigger is hit, then a SELL signal is generated.
Sometimes multiple important economic indicators are released at the same time and if their deviations are conflicting then the signals can be unreliable (price may move the opposite way). To avoid this, NAT can process multiple indicators (as programmed in the script) and only if their deviations do not conflict the trade signal will be generated.
When a trade signal is generated the autoclick feature allows to quickly execute the trade on your broker platform by instantly clicking either BUY/SELL/SUBMIT/etc. button to open the trade.
NAT supports 2 level trade triggers - BUY, BUY+ and SELL, SELL+. Often large deviations create larger, more predictable price movements. This feature allows to differentiate the trade size (lots/units) according to deviations, so you can open larger trades in case of large deviations to increase the potential profits.
Disclaimer: trading foreign exchange, futures, stocks, and other financial instruments on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in these instruments you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore your should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading, and seek advice from an independent financial advisor if you have any doubts.