I was running a multi-position daily system on EURUSD that was performing very good since 20 days. Today, in correspondence with NFP (a major news event) it performed disastrously.
I would like to know how your systems reacted to this event to understand if it’s fault of my system or not, and also how do they react to major events in general.
If it’s a common “problem” how do you react to major events? You turn off systems when you know that it’s gonna be a “strange” day?
Hi Francesco, personally I think it makes no sense to block a trading system before an event ….. when you optimize the system you don’t know what events have been in the past and how they behaved ….. The stops are part of of the “COSTS” of this job …… so you can use the trading systems as market access signals and manually manage the operations ….. there are those who do it …. Then keep in mind that Forex is difficult to create a reliable system over time ….
I think it especially depends of the structure of the system (type and quantity of trades).
Moreover I remember people adding to their systems a function to avoid nfp days, so I guess it’s a “common” problem.
If a System is in profit then why not exit manually before a News event?
Alternatively, sit with your finger on the trigger as the News comes out and if price goes the wrong way in the first few seconds then exit / close the System? 🙂
Re-enter manually after the dust settles if confident enough?
It will only cost you the spread / a few points … better than a drop of hundred or more points?
You could also add a code snippet that exits of there is a drop of > x points and run it on a 1 second timeframe so a MTF System.
I have the above Drop Exit on a few of my Systems.
There can be large drops / rises at times other than News events.
Optimise System on normal TF (5 mins, 1 Hour etc) and then, when happy. add the Drop Exit snippet on a 1 second MTF.
Problem is … there will not be much data to determine if it increases profit.
So … choose a data period with several big drops / rises (plenty during Covids) and run the System including the Drop Exit and judge … I’m glad I got out on that one!? 🙂
Then run without the Drop Exit … compare results?
Above method is due to 1 sec TF over 100000 bars is only about 1 week worth of data.
If anybody does above … report back how you get on please?
ByJust like I said above … you enter with a signal from the trading system and then you manage it as a trader …. or you do it with a one-second management ….. I now have stopped the trader I manage everything from the trading system ….. and I go to the sea … 🙂🙂
I manage everything from the trading system ….. and I go to the sea
What so your code caters for the drops / rises due to News etc?
And you’ve made that much money … you bought a yacht like Vonasi??
Apologies couldn’t resist the joke … need a laugh due to Covid lockdown!! 🙂
Maybe …. 😄😄 … no but I see the sea from home and I can’t resist taking a bath ….. but then I spent many years in front of the computer …. better a swim in the sea … 🏊
That’s why you need to optimize your variable on very long time >100 000 units if possible, short time / day in market, use stop determined on past data and so on…
Have a nice day
