MTP Development Notes 10｜News filter is not to miss opportunities but to "avoid accidents."
Hello, this is Tsumo.
This article isthe 10th installment of the MTP Development Notes.
Today as well, I will talk about something that won’t break even before winning.
This time’s theme is,news filters.
When running EA, news filters can sometimes seem a bit annoying.
Master is moving.
The chart is moving too.
The price range is also being exhibited.
Looking back later, it would have been profitable if entered.
And yet, it’s stopped by the filter.
In such moments, people think:
“What a waste.”
“If entered, I would have gained.”
“The news filter disturbed it.”
“Missed a good opportunity.”
I understand that feeling.
Around news and economic indicators, the market can move a lot.
Moving a lot means there is also a greater possibility of taking profits.
Therefore, stopping can look wasteful.
But here is something we must not forget.
Before a big move, the market first moves, andit can also crash badly.
News filters are not there to miss opportunities.
MTP-related products are here.
MTP: Master [Free]
https://www.gogojungle.co.jp/tools/indicators/79103?via=usersMTP: Slave [Paid]
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Around news, the market is not the usual one
The market around news is different from usual.
It doesn’t stop where it normally would.
It doesn’t retrace where it normally would.
Where it normally would move a few pips, it jumps big in an instant.
Spreads widen when they wouldn’t normally.
These things happen.
EA operates assuming a certain level of "normal" market conditions.
Enter at this price.
Follow at this distance.
Take profit at this width.
Close favorably at this retracement.
Trail at this condition.
But around news, those premises tend to break down.
Prices jump.
Spreads widen.
Fills are offset.
Prices swing up and down.
Price levels progress in an instant.
When this happens, normal rules suddenly become dangerous.
It is dangerous to run EA as usual when the market isn’t showing its usual face.
News filters exist to stop that from happening.
Markets move on indicators, but they’re easy to break before profits
When you see a market moving a lot on an indicator release, you naturally think:
“If I grab this, it’ll be big.”
“If I capture this range, it will multiply quickly.”
“If I ride it well, it’ll be quite profitable.”
Indeed, there are such moments.
But there is also something else to consider.
What happens if you don’t ride it well?
You jump in and it immediately reverses.
You fill at a price wider than expected due to spreads.
You enter at a worse price than intended.
You incur unrealized losses in an instant.
A sequence of chasing entries and averaging in continues.
Total lots increase.
Account health deteriorates.
These accidents happen.
A highly volatile market does not only increase profit possibilities; it also increases loss speed.
Especially with strategies like MTP that involve trailing or scaling in, the speed of moves is very important.
If the price slides slowly, you can still judge.
But if it moves in an instant, positions can increase before you can judge.
Therefore, it’s okay to be cautious around news.
There are times when avoiding losses is more important than not missing profits.
Spread expansion breaks EA design
What’s scary around news isn’t just the price moves.
Spread expansion is scary too.
Usually tight spreads can widen dramatically around releases.
At such times, the assumptions of the EA are broken.
Even prices that look favorable normally can become unfavorable when you include the spread.
Profit-taking ranges that would normally be recoverable become costly.
Entries that would normally be fine become negative from the outset.
This is quite important.
The EA doesn’t just trade based on chart prices.
In reality, it deals with spreads, commissions, swaps, and fill prices.
Around news, these conditions tend to worsen.
Especially for strategies that avoid stops or rely on trailing and scaling, disadvantage at entry lingers later.
Enter at a bad price.
Unrealized losses appear.
Chase further in.
Becomes heavier.
This flow should be avoided.
News filters exist to avoid not only price moves but also spread-related accidents.
Order slippage and price spikes cannot be fixed afterward
In news markets, you may not fill at the price you intended.
You may fill at a price worse than the one you planned to enter.
You may close at a worse price than intended.
Prices may jump and bypass your intended level altogether.
These things happen.
This is quite troublesome in EA operations.
Because once a position is filled, you cannot simply declare “not this after all.”
A position you hold remains in the account.
Positions entered at bad prices remain.
Positions opened with wide spreads remain.
Positions held at unexpected levels remain.
And they affect subsequent average entry prices and take-profit design.
In MTP, we consider favorable entries and favorable closes.
But around news, even those advantages tend to break down.
So, we should avoid getting close in the first place.
This isn’t pessimism.
It’s a design to avoid accidents-prone zones.
Nanpin (averaging in) and trailing EAs may not mesh well with news markets
EAs handling averaging in or trailing can clash with news markets.
The reason is simple.
News markets move fast.
Trailing conditions get reached.
Next tier gets reached.
Even further counter-move occurs.
More conditions reached.
This can happen in a short time.
Usually you can judge step by step.
But in a news market, it progresses in a rush.
As a result, positions tend to increase quickly in a short time.
Moreover, prices are volatile at that moment.
Enter at an unfavorable price.
Spread is wide.
Fills are displaced.
Retracements are shallow.
It breaks through.
This is dangerous.
Averaging or trailing requires good design.
Yet, even well-designed strategies encounter surprises in news markets.
Therefore, there is no need to fight exactly at that time.
What MTP emphasizes is not chasing a single big win.
It is about creating a robust operation.
Avoiding the fragile time zones.
This is a very natural judgment.
“If entered, it would have been taken” is an illusion seen later
When the market moves strongly after a filter stops you, people think.
“If I had entered, I would have taken profits.”
But this is a dangerous mindset.
Because you are looking back from the future.
If you look at the chart afterward, you can see where you should have entered.
You can see where you should have taken profits.
You can see where you should have stopped.
But at that moment, you don’t know.
How news reacts.
Which direction it will go upward.
Downward.
Whether it will move briefly and then reverse.
Whether it will become a trend.
Whether it will bounce up and down before direction emerges.
No one knows.
Nevertheless, judging after the fact as “entered, would have captured” is dangerous.
That isn’t verification.
It’s post-hoc regret.
What truly matters is whether you should have entered at that moment.
How was the spread?
What was the account free margin?
How many positions were there?
Was the lot size not too heavy?
Was the indicator impact not too high?
Could you endure if price moved unexpectedly?
Look at these things.
If you couldn’t endure, then not entering was correct.
Even if you ended up profiting, that decision may not have been safe.
In markets, even dangerous operations can sometimes reach the target.
But turning that into a success story will eventually cause an accident.
News filters automate the courage to stop
Humans are not good at stopping.
The market seems about to move.
It looks like a chance.
It seems like you could take a big profit.
If you don’t enter now, you’d miss out.
That’s what we think.
In particular, around news, the width of price moves increases, making you want to enter even more.
But that time is precisely the most dangerous.
Therefore, you need the courage to stop.
However, relying on willpower every time is hard.
Those feelings at that moment.
Recent profits or losses.
Whether you have unrealized losses.
Desire to recover.
Desire to extend profits.
These things pull your judgment.
Stop before major indicators.
Stop right after announcements.
Wait until spreads settle.
Wait until price movement returns to normal.
Check your account health before resuming.
Make this a rule.
News filters area mechanism that automates the courage to stop.
Stopping with rules rather than with willpower is important.
In markets, having a rule to stop can protect your account more than a rule to enter.
Post-news is also dangerous
When people talk about news filters, they think it’s enough to avoid just before the news.
But the period just after the news is dangerous as well.
Prices move greatly right after the release.
They swing briefly the opposite way.
Then they move in the main direction.
Then they return again.
The spread remains wide.
Liquidity is thin.
These things happen.
Right after news, the direction can look obvious.
It rose sharply.
So it’s a buy.
It dropped sharply.
So it’s a sell.
However, that initial move can be a false signal.
It rises briefly then falls.
It falls briefly then rises.
It bounces up and down before a direction emerges.
If you jump in right after news, you’re easily caught in these moves.
Therefore, there is value in waiting a bit after news too.
Watch calmly.
Wait for spreads to revert.
Wait for price movement to return to normal.
Check account health before resuming.
That’s what I think is fine.
There are price moves you didn’t capture.
But more important than those missed moves are the accidents you avoided.
The post-news market can look like a post-festival glow, with sparks still flying.
Getting too close will burn you, just like a fire.