Ten Steps To Success Using Secret News Weapon


Fx News Article by Fast Economic News, 2011/03/14

Following is a list of ten tips to help you maximize your profits and increase your skills and confidence in using Secret News Weapon (SNW) for news spike trading.

1 - WATCH THE TRAINING VIDEOS

Have you watched all of the training videos we've created for our subscribers? These videos cover all aspects of the software. The links to the videos can be found at the Client Login on the http://www.fasteconomicnews.com page.

There are also FAQs, tips, and other info. Just use your SNW user id and password to log in.

2 - USE A DEDICATED TRADING COMPUTER

Although by itself SNW does not require a large amount of computer resources to do its job, you don't want a situation where SNW has to compete with other applications for those resources. An important factor is the amount of concurrent applications you run. If, while running SNW, you also have open Internet browsers, charting software, audio and text news providers, etc, etc - in addition to your broker platforms - then the thing to do is check the impact on the resources (memory, processor, etc.) on your computer. A good step would be to open Task Manager and look at the info on the Performance tab. You'd want to do this while running all of the apps you normally run during trades. Also keep in mind anything you run in the background such as virus or anti-spyware software that only runs 'heavily' during certain times; it may be a good idea to check Task Manager several times over a couple of days. If you see your memory use way up, or your processer being heavily taxed, then a second computer for running just SNW and broker platforms may be a worthwhile investment to ensure these key applications have the horsepower they need at news time.

3 - BE KNOWLEDGABLE OF INTERNET CONNECTIONS, DELIVERY TIMER, GEOGRAPHY, AND LEASED SERVERS

We all know that speed is the name of the game when it comes to news spike trading. So here we'll discuss some of the things that affect the speed of data delivery.

First is your Internet connection. We recommend our customers have something like a DSL or Cable Internet connection (or faster). Normally that's plenty adequate.

Next is the Delivery Timer in SNW. One thing to keep in mind is that the delivery timer is measured in milliseconds (ms), and there are 1000 ms per second. So a delivery time of 50 is 1/20th of a second. If you see intermittent spikes in your delivery timer, it may be due to another application using computer resources (see Use A Dedicated Trading Computer below) or by trouble with your Internet connection. Also, as an important safety feature, be aware that SNW will warn you and will even disconnect you if your delivery timer exceeds the Warning or Max settings found in the User Preferences menu.

Now we get into the discussion about the triangle created between SNW's servers, your trading computer, and your broker's servers. The SNW servers are located in New York. For the purpose of example, let's say your trading computer is at your home in British Columbia, Canada, and your broker's servers are located in Chicago. Now, when the news is released, that data has to travel from SNW (in New York) to your computer (in Canada) and then your trade order has to travel from your computer (in Canada) to your broker (in Chicago). Obviously, this is a large "data triangle" for the bits data to travel. A better situation would exist if you were located in New York; then the data traveling from SNW to your computer would have a very short distance to travel (and a very short Delivery Time). This would effectively change that data triangle in the earlier example to essentially a straight line (from New York to Chicago).

While you may not be able to physically move to New York, you can still locate your trading computer there by leasing a dedicated server from an ISP in New York and running SNW and your trading platform on the leased server. (You would use a remote control software to run and control the leased server, so it would appear as though you were sitting right in front of it.) Here are two sources for leased servers that are located very close to our SNW servers: http://megatechie.com http://www.nycvps.com

This option is especially useful for subscribers who live in countries located far from New York, or where a decent Internet connection just isn't available.

One word of caution: with leased servers you get what you pay for, so we recommend you don't bargain shop.

4 - USE TEST MODE - A LOT!

SNW's Test Mode is a tool every SNW subscriber should know and use.

It's always a very good idea to do some testing by using the SNW Test Mode with a Demo account from the broker - to be sure you're very comfortable and sure of the broker's platform, the platform's setup, and the platform's response to SNW's mouse clicks. With the Test Mode and your Demo account, you can create a news release - complete with timed countdown - any time, at your convenience. It really simulates a real trade very well.

An additional benefit of working with Test Mode is to build your confidence, which in turn will allow for less stressful and better executed live trades.

5 - KNOW HOW TO DETERMINE TRIGGER VALUES FOR REPORTS

Often we're asked how to determine what triggers to use for specific reports. The best source for this information is a tool called SpikeCharts. This website shows you several views on how currencies reacted on specific market moving news releases. Be sure to visit the website and check it out; it's a great source of information that will make your spike trading more profitable. Once there, click the SpikeCharts link at the top to see an upcoming report, and the different views available. Also click on the Features link to see a Video Tutorial.

6 - BE AN EXPERT AT SETTING TRIGGERS AND HYPERCLICKS

First a word about receiving triggers automatically: If you check the box labeled 'Enable Trigger Auto-Load' in the User Preferences menu of SNW, SNW will automatically configure itself with the trigger and buy/sell settings contained in our suggested settings listed in the Next Trade information box for key reports.

Now on to more information on triggers and hyperclicks:

Prior to the news coming out you would configure potential trades in your broker's trading platform - just as you would configure them if you were going to enter a trade manually. (These setups can indeed include your Take Profit and your Stop Loss settings.) These potential trades are based on deviations from economists' expectations ("triggers"). Next you would configure the mouse clicks in SNW that are associated with each of those potential trades (see next paragraph).

You configure the mouse clicks (again, well ahead of the news) by using the HyperClick Setup (HCS) tool in SNW to capture the screen location for each mouse click where you would want the click to occur. SNW saves the screen location (X, Y coordinates) for each mouse click you configure. These locations are normally the 'submit' button(s) on your trading platforms. Normally you would configure multiple potential trade entries. [For example, one based on an extremely large negative deviation ("Sell2"); one based on on an extremely large positive deviation ("Buy2"); one based on an moderately large negative deviation ("Sell1"), one based on on an moderately large positive deviation ("Buy1"); and - depending on the sophistication of trading - even one based on a small or no deviation ("No Trade") - {No Trade clicks are sometimes used to close existing trades rather than enter new trades}. So, when the report is released, if a Sell2 event occurs (based upon your trigger settings for Sell2 in the software), only the mouse clicks associated with the Sell2 event fire.]

And, even though I mentioned using 'one' click for each of these five events, there are actually 10 separate mouse clicks for each of these five events - 50 clicks total for every single report (and we cover almost 500 reports in total). With this degree of flexibility, some of our users have found some amazing ways to use SNW to enter, exit, or change trades at news time.

And these clicks occur within milliseconds of a report being released. The beauty of the system is this: before the report is released, all of your trading decisions can be taken into account and corresponding mouse clicks configured so that when the report is released your decisions will be implemented within milliseconds.

To recap:

The idea between Upper and Lower Triggers (both for the positive and the negative sides) is that you can use more conservative numbers for the Upper Triggers (meaning a larger deviation) and also set your orders to perhaps trade a larger lot size, and you can use less conservative (i.e. riskier) numbers for the Lower Triggers (smaller deviation) and a smaller lot size with those orders. So when a huge deviation occurs, and a larger spike is therefore likely, you're ready with a larger lot size associated with those orders. Likewise when a smaller (but still 'ok' deviation occurs, and a decent but less than gigantic spike is likely, you're ready to profit, but with less risk via the smaller lot size.

Some further points:

Remember, when setting the hyperclicks, once the you've clicked one of the 'Set Coord' buttons on the HyperClick Setup window and that button is flashing, you want to move your mouse over the button you'll want SNW to click. Once the mouse is in the desired position, press the 'c' key on your keyboard to "capture" the mouse position (in x, y coordinates). When you click the 'c' key that position is saved to that trade event, and the 'Set Coord' button will stop flashing.

Another point, you can't skip a mouse click. If you set Click 2, but don't set Click 1, no clicks will occur. Similarly, if you set Click 1, Click 2, Click 3, and Click 5 (but skip Click 4), then clicks 1, 2, and 3 will work find, but - since you skipped 4 - click 5 will not occur.

Remember, if you have upper (UT2 and LT2) and lower (LT1 and UT1) triggers entered for a trade - in order for there to be a mouse click when the upper triggers are hit, you have to set the hyper clicks for Buy2 and Sell2... the hyper clicks for Buy1 and Sell1 will be ignored if upper triggers are hit. (If you don't set hyperclicks for Buy2 / Sell2 and you have values entered for the upper triggers - and one of those triggers is hit - then you'll be left on the dock waving goodbye to the ship as it sails away from port).

Also remember that your 'Buy' hyperclicks will be associated with whichever triggers (upper or lower) you have the 'Buy' Trade Action (TA column on SNW) set for - and same with the 'Sell' hyperclicks & 'Sell' Trade Action (TA).

In other words, if you have 'Buy' Trade Action for the report set up with the Upper Triggers and the 'Sell' Trade Action for the report set up with the Lower Triggers, then:

- The Buy2 Hyperclick will be activated if the UT2 trigger is hit

- The Buy1 Hyperclick will be activated if the UT1 trigger is hit

- The Sell1 Hyperclick will be activated if the LT1 trigger is hit

- The Sell2 Hyperclick will be activated if the LT2 trigger is hit

On the other hand, if you have 'Buy' Trade Action for the report set up with the Lower Triggers and the 'Sell' Trade Action for the report set up with the Upper Triggers, then:

- The Buy2 Hyperclick will be activated if the LT2 trigger is hit

- The Buy1 Hyperclick will be activated if the LT1 trigger is hit

- The Sell1 Hyperclick will be activated if the UT1 trigger is hit

- The Sell2 Hyperclick will be activated if the UT2 trigger is hit

8 - PREVENT BAD FILLS

As we see it, the main challenge in news spike trading is to prevent bad fills from your broker(s). Bad fills (aka "slippage") can result from either: 1) a broker raising spreads (sometimes to crazy amounts) or, 2) a market order being filled too far away from the intended/hoped-for level. In order to prevent either/both of these, we can use limit orders (or a "bounds" setting if the broker provides it). (In reality, bounds are really limit orders - set to prevent a fill if the price travels a certain distance from a designated price.)

On a buy signal, you would use a buy limit order with the price set at the maximum high price you would be willing to accept a fill. On a sell signal, you would use a sell limit order with the price set at the minimum low price you would be willing to accept a fill. If you order is not filled quickly, then you've avoided a bad fill; you would just cancel the order right away (so you were not filled at a later time). If your order is filled, well then your order has been filled at a good price and you are most likely in a profitable trade; all you need to do is close the position for a profit.

9 - USE SNW's SAFETY FEATURE

Some old men wear both a belt and suspenders to make sure their pants don't fall down. While we don't think this is necessary while spike trading, it is a good idea to have some safety features in place. One of these is the Safety setting for each report listed in SNW.

The safety feature is there to protect you against us receiving a 'bad' number from one of our news subscribers. (Although we've taken extraordinary steps to filter out bad numbers, the safety feature is an additional level of protection available at the user's side.)

To set safety: to set the safety replace the '99999' value in the far right (safety) column with safety the value you want to use for the report being traded.

As an example, let's say a report is coming out with the expected value of 55. Let's say also that, in your opinion based on your research, you thought a tradable, but minimal deviation is +/-5, then you would use +5 as your +UT1 and -5 as your -LT1. If you thought +/-10 is a very large deviation promising a great trade with big profit potential, then you would use +10 as your +UT2 and -10 as your -LT2. However if you think a deviation more than +20 or less than -20 would be nearly inconceivable and likely indicates a data error, then you would use a Safety value of 20. The safety value protects against either very high or very low deviations (by using the absolute value of the deviation); if the deviation exceeds the safety value (either positive or negative) no trade is allowed to go through via SNW. So, back to our example, if the number of 77 is received, you are protected by the safety setting, and on the other hand if the number of 32 is received, you are likewise protected by the safety setting.

10 - KNOW ABOUT SNW's PANIC STOP BUTTON

Another feature is SNW's Panic Stop button. As you know, in order for a report to be enabled (meaning that it will perform mouse clicks for hyperclicks you've set up for it), the check has to remain in the report's 'En' column. ('En' is short for enabled.)

When you click the large Panic Stop button all reports will become disabled. This means that checks will be removed from all reports' En column - all at once.

This button is there in case you see some activity (such as a pre-news spike) occur before report numbers are received, and you want a fast way to stop all mouse clicks from occurring. (Hence the name "Panic Stop.")

11 - USE MULTIPLE BROKERS

Several of our customers use more than one broker at the same time. Since SNW provides up to 10 mouse clicks per trade event, they set up each of their SNW spike trades with all of their brokers and thereby increase the odds of getting filled and making a profit on their trades. They also include 'new' (to them) brokers in their lineup - with small lot sizes initially - as they pass the Test Mode test mentioned above. If a broker goes stale, they remove it from their lineup and move newer, better behaving broker in its place.


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