Ohh the joy of brokers on NFP day! +34

Ahhh NFP day, either a glorious day of profits or a painful lesson in trading around major news announcements. Today for me was a strange mixture of both, though mostly due to luck did I manage to come away with profit in my pocket.

The scores on the doors where:

EURUSD -15

GBPUSD 0

EURUSD +11

EURJPY + 38

So overall I ended up +34 points for the day….however were it not for  my friendly (and soon to be replaced) broker then it may well have been +115 points.  I will now talk about the last two trades as they’re the most interesting (well to me at any rate).

EURUSD

Even Joe Bloggs in the street knows that the Euro is struggling at the moment.  The daily chart has shown that after a strong down drop we had a descending triangle forming with a base of support around the 1.2100 handle.  I think there was a lot of folk on Friday waiting for an opportunity for that level of support to break.

1.  Initially we had an order to short at 1.2220 however price could not reach that level and double topped around about 2215.

2. So our order to short was moved to 1.2195 which was triggered.  I had a target of 1.2125 for a possible run of 70 points with a stop loss at the old order level of 1.2220. 25 pips risked for 70 possible pips of profit.  That’s a handsome reward to risk ratio for an intra-day trade.

3. Price has triggered and moved south nicely so far….before trouble happens.  The brokers platform which I’m using for this trade suddenly freezes up.  The other platforms and programs I have running on this computer are fine.  But my broker for this trade freezes up completely…..but somehow still manages to close my position at 1.2184 for +11 pips!!

4. Oh great, price just keeps dropping and hits my target (and continues beyond).  I’m left with 11 pips instead of 70 and accompanied with much gnashing of teeth and complete indifference from a broker who thinks “it must be the internet connection your end,sir.”

But it gets more frustrating.

EURJPY

It’s very rare that I trade around NFP (or any news to be honest) but I was offered a good set-up and took a quarter trade (1/4 of my usual position). This allows me to trade with very small risk in place.

1. Price has moved up nicely running into the News and I decide to place an order to sell at 111.70 with a stop at 111.95 and a target of 111.10 for a risk of 25 and a possible gain of 60 pips.

2. News comes out and price drops…..it gaps even and once again my brokers platform freezes (I’m watching three broker platforms and once again this is the only one which freezes).  After what feels like an interminable amount of time (it was probably less than 30 seconds) my platform unfreezes itself and I find to my horror that and my order is filled at 113.39….that’s 31 pips away from my entry point!  People I’m trading with have also experienced slippage but they’re talking 3 – 12 points movement at most…..not 31 pips!

3. My broker platform is swinging about all over the place and so I just decide to hit the close button as my faith in their ability to run my position has melted away.  I’m taken out at 111.01 (9 points past where my target limit was).  So I escape with +38 points instead of +60.

So overall I’ve come away from this event with profit in my pocket (trying to look on the bright side) however I’ve missed out on a good chunk (+59 and +22). Perhaps that’s the price you pay for trading on an NFP day and in front of numbers.  Admittedly the EURJPY did gap…however it seems strange that a dozen other people who were trading with me got away with small slippages whilst I took a whopping 31 points! 

What kind of ‘world-class customer support’ do you reckon I received from my soon to be ex-broker after I called them up to discuss their service?

Till next time, trade well!

FXTrader Paul

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About FXTraderPaul

A professional Trader and Coach, FXTraderPaul blogs about his adventures from the front-lines of FX Trading. A Trader and educator who can walk the walk as opposed to merely talk the talk!

View all posts by FXTraderPaul

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  1. 2009 Spring TV Campaign | Currency Trading Exchange Guide - June 7, 2010

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