Data delay, any fast feeds out there?

[Tekunda]

Although I have not been trading Forex for a long time, this was one of the first things I have noticed and am trying now to use for my advantage. (My observation is strictly for the EUR/USD)
Whenever there is important economic data published (like today the ISM Index) 5 to 10 minutes before the set time the market gets nervous. You can see the pips jumping up and down about 5 pips in every direction. At around a minute after the data has been released it will make a sudden jump of about 6 to 10 pips in the direction according to the data (good US data, the pair goes north, bad US Data the pair goes south)
So today I could observe again this pattern and I made 40 pips in 5 minutes. The market jumped from 1.1187 to 1.1202 (the initial take off) and with about 30 seconds delay all the way to 1.1245. I jumped in at 1.1202. I am not in Forex long enough to swear an oath that this pattern will emerge every time data is being released, but this is certainly something which deserves further investigation, since the same pattern happened yesterday, where I made 70 pips in the opposite direction as the US data was very good. (Today is was lukewarm, which supported the EURO)
Basically you would need the same news feed, the big brokers use. I have emailed Bloomberg, since even paying for the service is fine if you can make such gains. The FXCM data feed is being delayed one minute, but it should be enough to only watch the trade station to see which way the market is heading after economic data is being released and you will need quick fingers.

I could even see following scenario: (You would need two accounts though, since hedging is not allowed with one account)

On one account you buy the pair about 5 minutes before data release and on the second account you sell the pair.
Now you wait for the market to take off in one direction. As soon as you see the marekt taking off in one direction, you close the opposite account. That would mean that you loose your spread and maybe a few pips. But with a 25 to 40 pip move, you should still be able to catch at least 15 to 30 pips AND you would play this pretty safe.

I would truly appreciate some feedback on my theories, since I made good money applying them so far. Has someone ever noticed the opposite? Say good US news and the pair would still take off like a rocket into the wrong direction? I have never seen this, but as I said, I am not in Forex long enough to be 100% certain. All I could see is that the market would not budge in any direction whatsoever, regardless of the news, but moving into the opposite direction? I think hardly ever.

[peteuk]

News is ok but the reaction can not always be relied on, one month a .25% drop in interest rates can have a negative effect, while the next month it will have a positive effect, market perception of things can be very odd at times! Data is not reliable enough to trade on by itself in my opinion, but may influence whether you hang onto a trade you're already in through TA, or whether you bale out pdq. Have you noticed that sometimes on data release the price will rocket one way, then just as quick rocket the other, there's no apparant reason for it apart from maybe quick profit taking by scalpers and such, but whether collectively they have the power to unintentionally move markets is debateable. Trying to jump on and off a moving train can be a dodgy pass-time

As for the 2 accounts idea, maybe an easier idea would be 2 stops, one either side of the market price, to stop you into a trade, the only problem is whipsaws, you might get stopped in on one and stopped out again very quickly on the other, rather you than me friend!

Forex, don't you just love it!

Pete

[Tekunda]

Peteuk, as I said, I have not been long enough with Forex to have seen all the patterns after data release. But this will come with time, as I will watch this penomena.
But let us assume that the jump will be contraire to the data being released. It seems there is always a jump after data relase. So maybe one should not bother about the data, but just get ready for the jump.

"Have you noticed that sometimes on data release the price will rocket one way, then just as quick rocket the other.."

Yes, I have seen this. But it would be enough to catch the train for a little while in one direction and then stop the trade. I think here greed comes into play.
People who have been riding such a jump realize that the train starts to slow down (here the risk is huge for a reverse) and instead of leaving the train right there, hope the train will accelerate one more time, which many times it does but many times it does not.
Look at what happened today. The EUR/USD pair went all the way to 1.1245 and started to linger there indecisively for a minute or so. So here the movement could have retraced or continued. For me, I left the train I made my 45 pips. Had I been a gambler, I could have made 30 pips, since it went to 1.1276 more OR lost had it retraced.
I think you can manage to jump on these sudden bursts after data release, but you need to practice and you need to learn to control your greed.
But as I said in the beginning, you bet that I will start practising, first on demo accounts and if I see that it makes sense, on a real account.

[peteuk]

.....you the very best of luck.

To me, 'data pips' are the icing on the cake, not the cake itself.

Trains....cakes......jeez, it must be the weekend spirit kicking in

Have a good weekend.

Cheers
Pete

[Tekunda]

You are right. They are indeed the rewards, if you have been a "good boy" during the week!