


int Width.Min = 1; |
Minimal width of model, bar |
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int Width.Max = 25; |
Maximal width of model, bar |
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int Height.Min = 15; |
Minimal height of model, pips |
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int Height.Max = 1000; |
Maximal height of model, pips |
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int KPeriod = 21; |
Period (bars quantity) for %K calculation |
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int DPeriod = 12; |
Period (bars quantity) for %D calculation |
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int Slowing = 5; |
slowing |
|
|
|
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int MaxBars = 1000; |
Max bar restriction |
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int Shift.Arrow = 40 |
arrow shift , pips |
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int Shift.Dot = 20; |
point shift , pips |
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int Shift.Line = 0; |
line shift, pips |
In this article we will consider technical aspects of trade on fundamental news. It is necessary to make a reservation that you should learn theoretical foundations of fundamental data analysis before applying technical tactics of trade on news.
Before starting consideration of separate strategies, we will allocate a number of general principles which we should follow at opening of positions on news:
- opening of position should not be done manually straight after appearance of news, but by means of pending orders set up in advance;
- it is obligatory to set up “small” stop loss at 10-20 pips;
- the profit is also should not be fixed manually, but by means of pending order – take profit, or by means of trailing stop;
- it is better to be at the terminal and to watch further developments of events at the moment of appearance of news;
- When choosing data for trading, you should give preference to news, which will lead to strong movement in the market with high probability.
The first reason. As we mentioned before, the appearance of news causes splash of volatility in the currency market. In this case, you simply will not have time to join the movement in time. No trader has reaction as quick as lightning. The market will be faster in any case.
The second reason is actually the other interpretation of the first one. A broker receives different prices from several largest banks, and then selects the closest variant to the price requested by the client. And the broker executes requests in the following sequence: 1) stop loss; 2) take profit; 3) other pending orders; 4) transactions "on demand", i.e. entry into the market "manually". Thereby, after the broker executes all pending orders, the price of entry into the market, offered to you, can be much worse than the quotation, requested by you. Pending order guarantees that the transaction will be opened exactly at that price, which you used to set up the order.
We’ve also emphasized above that at transactions on news the size of stop loss should be minimal. This results from the fact that after appearance of news the price moves quickly and in one direction. Moreover, 10-15 pips stop loss will provide quite favorable risk/profitableness ratio for the transaction.
Now let’s examine the principle of setting up take profit. Here we should take into account the average swing of price movement on one or another news. Trace on history the average number of pips that the currency pair, chosen by you, passes on economic indicator data. When take profit is set up, you should also take into account significant support/resistance levels.
News Trading Strategy 1
This strategy
includes setting up two pending orders in opposite directions – buy stop and
sell stop. It would be better to plan the transaction on trade on news in advance;
however we recommend to set up pending orders several minutes (!) before
appearance of news. All pending orders, which were set up earlier and are not
the part of strategy of trade on news, should be removed on the threshold of publication
of significant data.
Then a question arises: on what distance from active market price should we set up pending orders? We will consider possible variants:
1) The simplest way – on equidistant distance of 10-20 pips.
2) Taking into account the nearest support and resistance levels. We recommend to use this variant, if the current price has come nearer to strong support/resistance levels.
3) The third variant seems to be the most reliable. Often enough the price is traded in a narrow range in day of appearance of significant news, before publication of value of indicator.
If it is really
so, i.e. you see clearly formed corridor (volatility is very low in the market before
appearance of news), then it really makes sense to open a position on news. In
this case pending stop orders should be set up outside the bottom and top
borders of the range, formed within day.
You must set
up minimal stop loss and take profit, taking into account volatility, when you
use any of these three variants.
Example: “Tragic
reverse” on Nonfarm (pic. 1).
The data on
the employment market in the
Friday
08.12.2006
|
17:30 |
|
Nonfarm payrolls (November) |
132K |
115K |
79 (92)K |
|
17:30 |
|
Nonfarm payrolls (November) |
4.5% |
4.4% |
4.4% |
Picture 1. EUR/USD, М30 (each candle каждая was formed for 30 minutes)

News Trading Strategy 2
This
strategy includes opening of position in one way – in the most probable direction
of price movement from the point of view of tools of technical analysis. Here
trends are used quite actively. So, for example, opening of position in the
direction of day charts movement is possible.
The
position can be opened several minutes before publication of news, having set
up minimal stop loss and take profit, taking into account volatility.
You can set
up pending order as an alternative variant, but only in one direction.
Requirements on setting up stop loss and take profit remain invariable.
Retracement
We
recommend the following: avoid trade on retracements. If you missed the main
movement at publication of data, it would be better to refrain from trade on
news at all.
Conclusion
Trading on news can give you some good transactions every month and, thereby, to increase the set of tools in your trading strategy. Transactions on news are attractive because of quite high potential of profit and minimal risk.
Metatrader Expert Advisor "News Trader"

This adviser trading principal is based on economic news and is a very useful tool in the portfolio of every trader. In a given time, several minutes in advance of the news issue NEWSTrader places two different orders. There is a special mode within the adviser which allows to delete one pending order in case if another pending order was made. Several intervals are possible.
The following type of orders can be used:
MarketOrders = false; //open buy and sell market ordrers true/false
StopOrders = true; //open buystop and sellstop pending ordrers true/false
LimitOrders = false; //open buylimit and selllimit pending ordrers true/false
OCO = true; //One-Cancel-Other mode for pending orders
extern int Dist = 50; //distance from the market price to set pending orders
There is also trailing stop added.
The advise can work both on five-digits and four-digits quotations.
extern bool Acc5Digits = false; //set true if your broker provides 5 digits for EURUSD
Read more about MT4 expert advisor NewsTrader
Post your questions about about Fundamental News Trading and MT4 Expert Advisor "NewsTrading" on our MT4 Forum
Regards,
BJF Trading Group

Sphere of neural networks’ financial applications is actually boundless. Any goal concerning manipulation of financial tools, whether it is currency or securities, entails risks and needs to be estimated and predicted thoroughly. How quotations of the basic currencies will change tomorrow? Will outwardly successful company give credit back? How to choose profitable and at the same time reliable “investor’s portfolio”? Analytic departments of financial (and not only financial) companies have to solve all these and hundreds of other problems, using all kinds of analytic instruments. It is no mere chance that financial applications make up quarter of neural networks products market (let’s remind that size of global market of neural networks increases on 40% annually and exceeded 600 million dollars in 1994).
Neural networks appeared in
Russian market exactly in financial sphere. Fifty neural networks software
suites have been sold in
But why are
neural networks so attractive? What makes them so good for solving various
tasks on prediction and discernment? Not going into details, we can say that
currently there are four essentially different
approaches for solving tasks of analysis.
Firstly, if
data are interdependent and their volume is rather small, you can use classic
analysis methods (for example, correlation methods). Secondly, you can create
an expert system, using rules “if…then”. Thirdly, you can use methods of fuzzy
logic (they are in fashion today) and operate with qualitative characteristics,
such as “majority”, “reliable”, “some”, etc. And, at last, fourthly, in cases,
when input data volume is vast, you have no idea about their interconnections,
some part of information is distorted and some part of information is lost,
then neural networks will help you. You only have to enumerate factors, which
essentially influence the forecasted value, and to find enough examples
describing behavior of these values in past. Neural network will “be adjusted”
on the given totality of examples by itself, minimizing summary error of prediction.
Moreover, analysis of adjusted network allows to find hidden dependences
between input and output data, which often remain “behind the scenes”, when
using traditional methods. Assuming that character of interconnection between
specified parameters won’t essentially change for some time, you can use
adjusted and trained neural network for short-term (and sometimes long-term)
prediction.
“Well, it
is not for us…”, - disappointedly says reader, who was nearly fascinated by
cold shine of “perfect weapon”. Our financial market is formed solely by ruble rate,
and ruble is unpredictable. And also we have mysterious parliament, peculiar
taxes, grandiose financial pyramids, extremely simple advertisement, and many
other things that make business look like roller coaster “in Russian style”. It
is the real truth, but let us give some more precise definitions.
Firstly,
ruble as well as any other currency (including various coupons, levs, tugriks,
etc) can be predicted quite well – we only need high-end computers and one dozen
of experts. Game on the world currency
market has turned into a war of supercomputers a long time ago. Stories like
legend about Soros, whose daring game brought him one billion during one day, gradually
become a thing of the past. And when you read in the “Financial Times” that yen “dropped” dollar on
two points, it means that yesterday supercomputer of some “Sakura Bank” beat
its competitor from “Chase Manhattan” (or vice versa).
Secondly,
we are not as exceptional as we think we are. Our history saw many events:
local conflicts, revolts of interregnum, big scandals around false corporations,
etc. Scenarios of their development and influence on
financial market are studied well enough. Besides, an entire system of macroeconomic indicators,
like Dow-Jones average or S&P 500, has been worked out for many years; they
are sui generis “barometers” of current state of market. Many of these
parameters have been punctiliously recorded since 1901, and databases of reports
for several last months are the object of brisk trade. You might answer that
there were no such indicators in
At last,
thirdly (and it is the most important thing), state of financial market is not determined
by one (even dominating) parameter, but the sum total of processes of different
nature that have various speed of response. For example, dollar rate can fall
down within one hour (it happened more than once), but broker’s expectations,
reflected in futures’ quotes for the following month, will change much more slowly.
And if you have a tool for assessment of speed of this process (neural
networks) and iron nerves, you will have enough time to prepare and play competently
and skillfully. Eventually, what is more important for you – to predict “black
Tuesdays” or to get stable profit?
Let’s study
the use of neural network in financial prediction, using concrete example –
prediction of currency futures rate. Company that had successfully used neural
networks software suite Brain Maker Pro for its internal tasks, decided to try
it for prediction of futures quotes on Moscow Commodity Exchange in March,
1995. Futures contract quote on $1000 with June date of payment was chosen as
the object of prediction (input parameter of neural network). Input parameters
for training of network were changes of futures rates
during May, June, and July for the last four trading days (dynamics of the last
day was taken into account as a separate parameter, evaluated using special
formula), and ruble-to-dollar rate for four days. Training data included forty
last trading days (two months). After six and a half thousand steps of training
algorithm (it took 3 minutes of calculations) the neural network showed quite adequate
reaction on all set of given parameters, i.e. it was trained.
Then the
neural network was used for ten days for prediction of today’s futures rate for
June. The calculations were made when the current dollar rate and the last
quote of May futures had become known. As a rule, there was about one hour left
till trading on June futures. The result was unexpectedly accurate: the network
didn’t once make mistakes in predictions of change tendencies (decline or growth),
and deviation of real rate from predicted rate made up no more than 10 rubles
in nine cases from ten.
Of course, such method can also be used for playing on GKO, for currency dealing, and for many other applications. But the given example is quite typical, because it shows some interesting rules of work with neural networks. Firstly, experience has shown that in spite of simple interface of neural networks they are very delicate and began to obey to their owners only after 2-3 weeks of intensive study and “adaptation”. Secondly, when choosing toolkit, pursuit of low prices does not prove its value. Of course, you can use so called “student” version of neuron network suite for $300, but for new task adjustment you will need high-end professional suite like BrainMaker Pro, OWL or something similar. Thirdly, analytic tools of neuron network suites open new opportunities for study of parameters of tasks, as an adjusted network accumulates in itself hidden regularities of a subject field. For example, in the given example with futures the neuron network suite was also used for analysis of influence of current dollar rate’s fluctuation on futures quotes with delayed date of performance. There was found quite an unusual regularity: on the level +30 rubles for bid there comes a kind of “saturation” of brokers’ expectations, and further growth of rate does not affect futures quotes (generally, it can be explained, however it is quite problematic to find such dependence, using traditional analytic methods).
![]() | MetaTrader Expert " Neuro 1" showed moderate results for more than 4 months real account tests. It is based on simple Artificial Intelligence model and few simple indicators, which feed the network with information. It has small TP to cut profit very fast and the optimization showed that with current parameters of market if he finds the wave he can cut allot! If market conditions doesn't met the profit needs it will sleep. The sleep time also being controlled by Neural Network and you can never say when it get "the good mood" again. Read more>>> |
And what is
about responsibility for decisions making? It is clear that the price for
mistake in financial operations is too high! We advice you (following the
Americans) to use the following method: if neural network suite shows approach
of “black Tuesday”, and, on the contrary, your broker is sure in success –
trust broker. If he makes mistake, you won’t lose (because your
broker is, probably, quite experienced, and together with him majority of
competitors will make mistakes, too) – your neural network suite, which predicted financial
collapse correctly, will also predict a winning game strategy. If the neural
network makes mistake, you won’t lose, too; you’ll just
once more note that computers can’t be trusted. Besides, there are a lot of
tasks, where the price of one mistake is not so high, and you have some time to
make additional adjustments. For example, Inkombank specialists are seriously
thinking over use of neural network suites for selection of the most optimal
places for opening of new branch offices. From methodological point of view such approach is
safe: undoubtedly, the net will make choice among good variants easier, and knowingly
bad variants can be set aside by the expert himself.
If to formulate the place of neural networks in arsenal of your financial tools in one phrase, we can say, that the neural network is a prompter for skilful analyst. Neural network won’t help looser, but good broker can improve his game in many times.
BJF Trading Group
http://iticsoftware.com
What is scalping? Scalping is
a trading strategy based on taking profit of 2-15 pips. Majority of scalping
systems is based on opening of orders from borders of channel during quiet time
on market. What is important to take into account when creating scalping
trading systems?
Spread is a difference
between Bid and Ask, i.e. between buying price of currency and selling price of
currency. Of course, if we are going to create trading system aimed to bring
profit of about 3-5 pips, even 1 pip difference in spread is very significant.
Pip price is quite important, that is why the development of systems for pairs
like EUR/GBP (pip price is high) is made very often. Quotes are also vitally important.
What does it mean? I think it is no secret that many brokers filter
(smooth) their quotes. If we compare ticks of global quotes supplier and almost
any broker with Metatrader 4 platform, the difference will be obvious. Thereby brokers
make functioning of scalping systems almost impossible. Maybe you saw systems
added in monitoring on little-known servers; the profit curve of these systems
is almost a flat line. Probably, someone even bought such systems and was very
disappointed, when such system rapidly spent his deposit. This is the way how
small brokers attract clients, demonstrating smooth quotes in demo version. But
if you open an account in such “office”, the probability of that you won’t have
the same quotes in reality or won’t get your win. Your account will be frozen. Dishonest
developers of expert advisors also use this scheme. They monitor their simple
advisors on such quotes and sell them to beginners.
Advice
1: you should buy only advisors with forward test on Alpari, InterbankFX, and
Fxdd servers or servers of other major broker.
How to choose quotes. Comparison of quotes
is not simple. Our company has developed DDETool metatrader program for this purpose. Using
our program you can make a real-time import of quotes from Metatrader program
to any program with of DDE server support, for example, to MS Excel. MS Excel
resources give you an opportunity to make any analysis of ticks and to choose
broker. Some brokers do not allow to earn money using scalping.
DDETool
use example
Install DDETool on terminal: AlpariUS. These brokers are often
recommended as the most appropriate for scalping. Let’s import data of both
DDETool in MS Excel. We can make a real-time comparison of quotes (ticks) of several
brokers: it is possible to write scripts and to compare quotes using MS Excel
or accumulate ticks and make a
comparison.
Surely you want to ask why we
do not compare minute quotes. Here is
the answerJ. Brokers can correct quotes from history, so only the real-time
comparison of ticks gives us a real picture.
It is necessary to understand
that broker is not on your side, and any trading advices should be considered
very carefully. Only having good tools of analysis (metatrader software) and
trade (metatrader expert advisors) you can beat broker on his territory.

Advice
2: you shouldn’t work with brokers who do not permit to use scalping even using
ordinary expert advisors.
Accuracy of input in scalping
systems is the guarantee of system’s success. I know some well working scalping
systems, and their input point is chosen in different ways. For example, input
is realized from High and Low in popular Stomper EURGBP metatrader expert advisor, and input is realized
from linear regression channel in metatrader expert IntellectualPro and the channel is
optimized by many iterations (it improves quality of input).
Output also can be realized
in different ways:
-
Fixed take profit and stop loss (EA Stomper)
-
Take profit and stop loss pulled up along channel
borders of linear regression (EA IntelectualPro).
Selection of trading terminal for scalping. We can adapt (rewrite) expert advisor from Metatrader 4 trading terminal to any other trading terminal of broker who has API, for example, forex.com or dukascopy.com. We recommend this way for traders with big deposits.
Best regards,
BJF Trading Group






|
METATRADER BROKER |
EURGBP Spread, pips |
Maximal drawdown, % |
Expected payoff |
Strategy Tester Reports: |
|
Alpari |
2 |
2.89 |
31.03 |
Click
to view |
|
***FXDD "MT extreme" account ( |
2 |
5.77 |
16. 75 |
Click to
view |
|
MIG Invest (Swiss) www.migfx.ch |
2 |
3.41 |
40.29 |
Click
to view |
|
ATC-FX-Pro (USA) www.atcbrokers.com |
2 |
5.06 |
10.94 |
Click
to view |
|
Advised Trading Platform (Swiss) www.advisedtrading.com |
2 |
4.83 |
44.53 |
Click
to view |



|
Figure 1 - This table
shows just how difficult it is to recover from a debilitating loss. |