GBPUSD - could this be a news announcement?

[alichambers]

Hello -

I was watching the GBPUSD this am. I am UK based, so times on chart below are GMT (1 min timescale):



I was looking at short trades around 9:15am (black circled area), then at 09:30 saw a huge rise with three green candles (red circled). If I was short at 09:20am I could have been wiped out - even with a stop loss, as it may not have been triggered in time?

Could this rise be due to an FX news announcement? If so, how would I keep out of the market in future to avoid these unpredictable times?

Thanks,
Alex

[eudamonia]

Alex,

The only way to keep away from the news is to know it's coming. Forex Factory has reasonably accurate information about upcoming news in their calendar http://www.forexfactory.com/. Although sometimes news comes out early/late and that's why using stop losses is important.

Edward

[alichambers]

Thanks Ed. I'll check that site.

I always use stop losses - although reckon I'll stay out completely when the news is due. The market may move too fast for the SL to be triggered when you need.

Alex

[pitboss]

Ali,

To prevent market moving too fast where your stop limit is not executed and to prevent a catrostropic loss, I would suggest using a stop market order.

Diffenence being stop limit sez, if market price reaches stop price a limit order is placed, which can be passed. Stop market sez, if market price reaches stop price a market order is placed for execution. The stop in either case is just the trigger to place the order whether limit or market.

If your sitting at your computer and monitoring the action, you can comfortably use a stop limit. If your not going to be available to monitor the action and you have a position, it is a lot safer with a stop market. Yeah, sometimes you'll get less than you wanted but it is a lot better can looking at your screen and seeing that a pair like GBP has moved 121 pips beyond your stop limit

FrankV

[alichambers]

Thanks Pitboss.

I've been using the "Calendar" link at Forex Factory to monitor for news announcements.

However, which of the news announcements do I use to stay away from the market?

For example on May 22nd, USD had announcements 8.30am, 9am, 10.05am, 10.30am - but it only seems to be the 8.30am one that gave a 120 pip rise in the opposite direction to the trend.

[jtrade]

Ali - UK Retail Sales came in better than expected yesterday at 0930 UK time. I check the Forex Factory calendar every morning.

PS. If you are in a position just before news and it is only marginally profitable, it may be wiser to exit to avoid a big negative spike. If I want to hold a profitable short-term position into news, I will usually take my stop OFF, to avoid one of those 100 tick, super slippage whipsaw spikes...