Forex News Trading Insights 2 – Double Fibonacci System – Your entry matters…

One of the most asked questions that I get on news trading is how to determine your entry.  Let’s face it, spike trading is pretty much dead, with brokers playing tricks on you, widening the spread, delay execution, nasty slippage, you name it… unless you still deal with a broker that is from the dark ages of online trading, chances are you won’t find one that let’s you trade the news profitably, at least not for spike news trading… And for those who are still exploiting such brokers, you might risk account closure, or your broker may just outright take your money away on the basis of exploiting the market.

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For those who don’t know what a News Spike Trading is, it is a style of news trading that a trader executes his/her order immediately after a high impact news release with the intention of taking a position seconds before his/her broker updates price feed.  Since major news usually cause market to spike either direction, and this method aims to capture that spike, thus it is called news spike trading.  This is in essence exploiting your brokers as they have to suffer financial loss due to latency in their price feed and actual market reaction.

I think is essential to understand this fact before we take look at what I’m about to share.  Here is an analogy for you:  Imagine one day you got a credit card in you mail and it has no limit on the card.  It’s obviously a mistake but you decided to use it anyways, after all it’s free money,  so you thought… until one day someone catches on, and cancels your card… This is exactly what is happening with news spike trading.  Remember your brokers are necessary evils in your trading.  They provide a service and they should get compensated, and when the market is moving in sharply due to news releases, they have the rights to protect their interests; all you need to know are the rules of the game, and play by the rules…

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That’s why what I am sharing with you is going to make so much sense to you, if you trade the news; it’s called the Double Fibonacci Method.

I use this method everyday to calculate my entry after the news, and I have seen first hand how accurate this method is.  You can use this with any high impact news and pinpoint your entry after release and prevent you from jumping in either too late, or too early.

So, without further ado, here it is:

About Henry Liu

My name is Henry Liu and I am a Forex Trader and Mentor. I help traders achieve consistent income trading Forex while spending less time trading. My focus in trading is a combination of Fundamental Analysis, Technical Analysis, and Market Sentiment. Far too many retail Forex traders concentrate on just one aspect of trading, technical analysis, and ignore everything else; it is my goal (and vision) to educate every trader on how to take advantage of news trading and become more balanced traders.

You can find more information about me on my Google Profile.

Comments

  1. eche david says:

    Could you have it in a downloadable format…so we could just watch it on deskstop after downloading it for the sake of folks like us that have problems watching it streaming online. Guess its due to poor bandwith here. Thanks.

  2. eche david says:

    Could you have it in a downloadable format…so we could just watch it on deskstop after downloading it for the sake of folks like us that have problems watching it streaming online. Guess its due to poor bandwith here. Thanks.

  3. eche david says:

    Cant seems to watch the video. Not loading beyond well. Have been following your news trade alert. Very great. Lots of hard work you putting into your game. I respect you. However, is there a way I can get to see this double fib system?

  4. eche david says:

    Cant seems to watch the video. Not loading beyond well. Have been following your news trade alert. Very great. Lots of hard work you putting into your game. I respect you. However, is there a way I can get to see this double fib system?

  5. Hi,
    I am using FXCM and a newbie. I am workgn on a demo account and have wasted lots and lots of money in Fibonacci. I have gone through your Fib tutorial and other tutorial in Youtube….I am following the exact methods but still not able to get the retracement working for me…Infact the market looks so flat in 5 mins or 15 mins that I am unable to find out where to dray fibs line….please help…

    I have also lost 100 dollars in a realy market 🙁

  6. Hi,
    I am using FXCM and a newbie. I am workgn on a demo account and have wasted lots and lots of money in Fibonacci. I have gone through your Fib tutorial and other tutorial in Youtube….I am following the exact methods but still not able to get the retracement working for me…Infact the market looks so flat in 5 mins or 15 mins that I am unable to find out where to dray fibs line….please help…

    I have also lost 100 dollars in a realy market 🙁

  7. i thank you
    i have been following your news alert infact is good but one 6hing i will like you to explane to us out there is exctly when to enter the trade after the news is been release is it 30 mins or 40 mins thank you for been in there for us

    • I usually wait about 5 to 10 minutes for a retracement. Every situation is unique, but the common denominator is to wait for decent retracement, and that could be calculated by the double fibo method.

  8. i thank you
    i have been following your news alert infact is good but one 6hing i will like you to explane to us out there is exctly when to enter the trade after the news is been release is it 30 mins or 40 mins thank you for been in there for us

    • I usually wait about 5 to 10 minutes for a retracement. Every situation is unique, but the common denominator is to wait for decent retracement, and that could be calculated by the double fibo method.

  9. please sir i anter this forex trad but one thing that holding me to not treding is that i dont have any one to teach me how to trad so i realy need your help

  10. please sir i anter this forex trad but one thing that holding me to not treding is that i dont have any one to teach me how to trad so i realy need your help

  11. Ali Forex says:

    Hello Henry and Thank You For Your Share.
    I have 2 questions.

    1- We Will Go To Trade With Double Fibonachi When News Release Has Been Deviated?
    Cause Some times It is Possible That News Hasn’t Deviated But Market Has a Good Movement.

    2- What is The Best Point For Our Stop loss?

    Regards.
    Ali reza

    • 1. Only after the deviation is hit, which is the first requirement for trading news. If deviation is not hit, then stay out of the market.
      2. You put SL 30 pips but never beyond the pre-release level.

  12. Ali Forex says:

    Hello Henry and Thank You For Your Share.
    I have 2 questions.

    1- We Will Go To Trade With Double Fibonachi When News Release Has Been Deviated?
    Cause Some times It is Possible That News Hasn’t Deviated But Market Has a Good Movement.

    2- What is The Best Point For Our Stop loss?

    Regards.
    Ali reza

    • 1. Only after the deviation is hit, which is the first requirement for trading news. If deviation is not hit, then stay out of the market.
      2. You put SL 30 pips but never beyond the pre-release level.

  13. Hi Henry,

    I am in Glasgow in the UK unfortunately I cant see your video for the Double Fib Method,

    Do have a soultion for this?

    Thanks
    Les

  14. Hi Henry,

    I am in Glasgow in the UK unfortunately I cant see your video for the Double Fib Method,

    Do have a soultion for this?

    Thanks
    Les

  15. And following on from that Henry,

    I just wanted to be clearer on your ‘golden rule’ i.e. getting out if it goes above pre-release at 2:17.

    Could your clarify that?

    When you say when the price goes above the pre-release level … do you mean the price at the top of the long blue bar or the bottom of the blue bar … my feeling is you mean the top of the bar right?

    Therefore … after the spike, you’re waiting for it to retrace somewhere below 143.70 (on the chart at 2:32) …. and then take a position in the 143.0-143.70 range right? Depending on what the strength indicator says.

    Is this correct?

    Thanks again Henry.

    • Pre-release is where the price is just 1 second before the release. Don’t get caught looking at candle, look at the price, see where it is and write in down if you need to.

      Henry

  16. And following on from that Henry,

    I just wanted to be clearer on your ‘golden rule’ i.e. getting out if it goes above pre-release at 2:17.

    Could your clarify that?

    When you say when the price goes above the pre-release level … do you mean the price at the top of the long blue bar or the bottom of the blue bar … my feeling is you mean the top of the bar right?

    Therefore … after the spike, you’re waiting for it to retrace somewhere below 143.70 (on the chart at 2:32) …. and then take a position in the 143.0-143.70 range right? Depending on what the strength indicator says.

    Is this correct?

    Thanks again Henry.

    • Pre-release is where the price is just 1 second before the release. Don’t get caught looking at candle, look at the price, see where it is and write in down if you need to.

      Henry

  17. Hi Henri,

    I understand your video here and the double Fib technique, but at what moment do we get in to the market (Buy or Sell). What would be the result?

    Thanks
    Patrick

  18. Hi Henri,

    I understand your video here and the double Fib technique, but at what moment do we get in to the market (Buy or Sell). What would be the result?

    Thanks
    Patrick

  19. JONATHAN UWAMARI MATHEW says:

    Hi Henry Liu,you are absolutely a guru in forex.your currency meter have been of great help to me. Now you are here with another great revelation.Thanks a million. However,i still need to learn how to use the double fibonacci system to get a better entry point.The meter is really great.

  20. JONATHAN UWAMARI MATHEW says:

    Hi Henry Liu,you are absolutely a guru in forex.your currency meter have been of great help to me. Now you are here with another great revelation.Thanks a million. However,i still need to learn how to use the double fibonacci system to get a better entry point.The meter is really great.

  21. can you develop this into software?
    2.what time frame should i use for news trading the pre-release time -fibonancci plotting-chart
    3thank you

    • OJ:

      As long as you can see the opening of the trading day, so 30min to 1 hour seems appropriate. I guess you can make an indicator, but I don’t think I know enough MQL4 language to do that.

  22. can you develop this into software?
    2.what time frame should i use for news trading the pre-release time -fibonancci plotting-chart
    3thank you

    • OJ:

      As long as you can see the opening of the trading day, so 30min to 1 hour seems appropriate. I guess you can make an indicator, but I don’t think I know enough MQL4 language to do that.

  23. Dear Henry

    First, thank you very much for the information.
    Second, as a forex trader I experienced whatever you mentioned. Honestly, that is my problem too.
    Third, unfortunately I can not see your video posts! I am using Mozilla Firefox but I can not see it.
    I wonder if there is any other link or file to download this video?
    Also, I couldn’t watch the video of “News Profiteer Meter” too.

    Regards

    • Leon:

      Is it because of your equipment, your region, or just you don’t have the latest flash player? I’d get better PC since they are so cheap now, and try to update my flash player from adobe.com, and lastly, get an U.S. Proxy server so that I can watch U.S. videos

      Henry

  24. Dear Henry

    First, thank you very much for the information.
    Second, as a forex trader I experienced whatever you mentioned. Honestly, that is my problem too.
    Third, unfortunately I can not see your video posts! I am using Mozilla Firefox but I can not see it.
    I wonder if there is any other link or file to download this video?
    Also, I couldn’t watch the video of “News Profiteer Meter” too.

    Regards

    • Leon:

      Is it because of your equipment, your region, or just you don’t have the latest flash player? I’d get better PC since they are so cheap now, and try to update my flash player from adobe.com, and lastly, get an U.S. Proxy server so that I can watch U.S. videos

      Henry

  25. hello mr henryliu i am george one of your news trader and i love trading forex but i started forex from 2008 but up till now i can realy say i make a good money from it because many time i make an loose it but when i meet you on line i improve in my trading knowlegde but i want to know when you see risk aversion when to enter the trade and also risk appetit and when to know that confirm that it real and which time to inter please let me know about it

  26. hello mr henryliu i am george one of your news trader and i love trading forex but i started forex from 2008 but up till now i can realy say i make a good money from it because many time i make an loose it but when i meet you on line i improve in my trading knowlegde but i want to know when you see risk aversion when to enter the trade and also risk appetit and when to know that confirm that it real and which time to inter please let me know about it

  27. Hi Henry> How long do you wait untill you start the retracement?

    • Tim:

      As soon as the market starts to move, and sometimes it takes up to 30 minutes, but I stay away from the market after the first 45 minutes is gone.

  28. Hi Henry> How long do you wait untill you start the retracement?

    • Tim:

      As soon as the market starts to move, and sometimes it takes up to 30 minutes, but I stay away from the market after the first 45 minutes is gone.

  29. Ryan Miller says:

    Hi henry

    When doing the double fib technique you say to take the first one from the day low to the day high.
    If your predicting the market to drop do you do the opposite and take from the day high to the day low?

    RYan

  30. Ryan Miller says:

    Hi henry

    When doing the double fib technique you say to take the first one from the day low to the day high.
    If your predicting the market to drop do you do the opposite and take from the day high to the day low?

    RYan

  31. Hi Henry,

    Good piece of work. One question : Will you be able to make this into an eBook?

  32. Hi Henry,

    Good piece of work. One question : Will you be able to make this into an eBook?

  33. Hi Henry,
    thanks for your insight.
    With the fibonaccis (fibs) I usually just draw the second fib that you draw … AFTER the news release … and wait for it to track back to about 30-50% of it’s highs after the news event.

    I don’t see why you need it to overlap (the 1st fib and 2nd fib) … could you clarify this?

    • I just find when you have 2 fibs drawn from the beginning of the trading day and when they overlap, market tends to regard that as stronger levels. I guess different traders use different way and ranges when drawing FIb lines, and adding that additional fib helps day traders especially if we see pre-news pricing in at the open.

  34. Hi Henry,
    thanks for your insight.
    With the fibonaccis (fibs) I usually just draw the second fib that you draw … AFTER the news release … and wait for it to track back to about 30-50% of it’s highs after the news event.

    I don’t see why you need it to overlap (the 1st fib and 2nd fib) … could you clarify this?

    • I just find when you have 2 fibs drawn from the beginning of the trading day and when they overlap, market tends to regard that as stronger levels. I guess different traders use different way and ranges when drawing FIb lines, and adding that additional fib helps day traders especially if we see pre-news pricing in at the open.

  35. oloyede says:

    Good day, Mr Henry Liu.
    please sir, i have loose a lot of money in forex and i don’t want to quit this forex because i know that i will make here in forex. Please sir, how can you help me out of this mess.

    • I suggest that you trade demo account until you are making money with it, then transition to real account slowly, first with mnimum deposit then add as you go.

  36. oloyede says:

    Good day, Mr Henry Liu.
    please sir, i have loose a lot of money in forex and i don’t want to quit this forex because i know that i will make here in forex. Please sir, how can you help me out of this mess.

    • I suggest that you trade demo account until you are making money with it, then transition to real account slowly, first with mnimum deposit then add as you go.

Trackbacks

  1. […] Posted on 06. Apr, 2010 by Jakob in How To, Random Noise Henry Liu has created two new videos where he shares some of his thoughts about forex trading. In the first video he covers some different aspects about market timing, support and resistance levels, etc. and in the second video he is sharing his approach to find the right place to enter a trade after news releases using fibonacci retracement. The first video is taken from Friday’s live trading session (3/26/10) with Henry Liu´s Mastermind Mentoring class, so you can get a taste of his program. Although I don’t really like to idea of using fibonacci to determine an entry level after news release, Henry still has some valid points. These videos are free for everyone, and you don’t even need to opt-in. Check out the first video here and the second one here. […]

  2. […] Posted on 06. Apr, 2010 by Jakob in How To, Random Noise Henry Liu has created two new videos where he shares some of his thoughts about forex trading. In the first video he covers some different aspects about market timing, support and resistance levels, etc. and in the second video he is sharing his approach to find the right place to enter a trade after news releases using fibonacci retracement. The first video is taken from Friday’s live trading session (3/26/10) with Henry Liu´s Mastermind Mentoring class, so you can get a taste of his program. Although I don’t really like to idea of using fibonacci to determine an entry level after news release, Henry still has some valid points. These videos are free for everyone, and you don’t even need to opt-in. Check out the first video here and the second one here. […]

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