News Trader is a MetaTrader expert advisor developed to help Forex traders with news trading opportunities that arise during important macroeconomic releases. The EA can be used to trade news volatility straddle strategy. It is important to understand that News Trader is not a fully automatic solution — a trader has to set the date and time of the news release and also to decide on the appropriate stop-loss and take-profit. However, ATR-based stop-loss and take-profit setting is available too. This EA supports flexible position sizing in addition to the usual fixed position size. It is available for the following trading platforms: MT4, MT5, and cTrader.
News Trader opens one or two trades (Buy and Sell by default) some time before the news announcement (1 minute by default). It applies stop-loss and take-profit levels according to the input parameters given by a trader. If requested by the trader, the EA continues to modify stop-loss and take-profit levels until the very release of the news to keep them relevant to the current price. When the news is out, the expert advisor will apply trailing stop according to the trader's choice. If one or both trades remain active one hour (by default) after the news, the EA closes them.
The chart screenshot shows the EA operation during and after the US and Canadian monthly employment reports combined with the Canadian trade balance report. The news came out at 8:30 EST on December 4, 2015.
The Buy and Sell entries are shown with two arrows pointing to the right. Their stop-loss levels are marked with the red dashes above and below. The take-profit levels are the blue dashes.
The currency rate gapped up after the news, executing the Sell position's stop-loss. Unfortunately, it does not reach the take-profit of the Buy trade. The position is closed by timeout one hour after the news release (blue arrow pointing left). The profit was about three times the loss in this case, which is good but not great. Apparently, it could be bigger if a tighter take-profit was used.
News Trader expert advisor supports two position sizing modes: plain fixed position size and risk-based position size. The first mode is very simple — a trader just enters a volume in lots to be used with every position opened by the EA. The second mode enables either common fixed fractional position sizing or fixed money risk position sizing. Both use the maximum tolerated risk given as percentage or as money.
The expert advisor can use Average True Range indicator to automatically choose stop-loss and take-profit levels for a news trade base on the preceding volatility of the currency pair. ATR value is calculated based on the given period. The stop-loss and take-profit are then calculated based on separate multipliers before entering opening a position.
Due to the nature of the News Trader EA, there are no backtesting results for it.
What news are worth trading?
Any big news are good for this EA: interest rate decisions, central bank minutes releases, CPI, GDP, trade balance, employment reports, etc. The more important the news the better the chance to hit take-profit.
What stop-loss and take-profit should I set?
I recommend setting 10 standard pips stop-loss and 50 pips take-profit on such news as GDP, CPI, or retail sales. 15-20 pips stop-loss and 75-100 pips take-profit on such news as FOMC rate decision, FOMC minutes, or NFP.
What currency pairs are good for News Trader?
It can work with all trading instruments, but I recommend using it with very liquid currency pairs only: EUR/USD, GBP/USD, USD/CAD, NZD/USD, etc. Slippage and spread widening on exotic currency pairs may result in premature stop-loss execution.
What is the difference between the versions for MT4 and for MT5?
MT5 version cannot open both Buy and Sell positions on the same currency pair. Instead, it will open pending orders that will mimic those positions. Unfortunately, it increases exposure to market volatility — use MT5 version only with brokers you know for good execution and not for abnormal spread widening.
Why is my actual loss bigger than the risk I set via input parameters when
There are three possibilities:
- The EA will adjust stop-loss during the period between position opening and news release if PreAdjustSLTP = true. It may result in a bigger stop-loss with the same position size, resulting in a higher potential loss.
- When using two positions (both Buy and Sell), there is a small risk of both hitting stop-loss. In this case, you may experience a loss twice your original intended risk size.
- Price gap after the news may result in your stop-loss executing at a worse price, adding extra loss to the bottom line.
This EA is ECN-compatible. You must set ECN_Mode input parameter to true in order to enable ECN-compatibility for this expert advisor. Otherwise, you will most likely be seeing OrderSend Error 130 messages when EA will be trying to open positions. This is because, if you are trading with an ECN broker (with market execution for orders), you cannot set SL/TP on position opening. You have to open a position first without SL/TP and only then modify it, adding stop-loss and/or take-profit level.
Warning! Before you ask basic questions regarding installation of the expert advisors, please read this MT4 Expert Advisors Tutorial to get the elementary knowledge on handling them.
Do you have your own trading results or any other remarks regarding this expert advisor? Discuss News Trader with other traders and MQL programmers on the experts forums.