I Made $1,300,000 in 12 Months — Copy My News Trading Strategy

JJ Simon reveals his $1.3M news trading strategy using fair price theory and expected vs unexpected news for Nasdaq futures.

Key Takeaways

Fair price theory is central to JJ Simon's news trading strategy.
Expected news is mostly priced in, so trading reversions to pre-news prices is effective.
Unexpected news creates new fair prices and opportunities for continuation trades.
Using reliable news sources like Forex Factory helps time trades without needing to interpret sentiment.
Managing risk around market open and limiting trading hours improves strategy effectiveness.

What the video covers

JJ Simon made over $1.3 million trading prop firms in 12 months using a news trading strategy.
He provides proof of payouts from major prop trading firms like Topstep, TradiFire, E8, Lucid, FundedNext, and Alpha Futures.
The strategy is based on his fair pricing theory, focusing on trading Nasdaq futures back to a fair price after news events.
Expected news (red folder US impact news at 8:30 a.m. EST) is usually priced in, so trades focus on reversion to pre-news prices.
Unexpected news creates a new fair price and can be traded by following a price drift in the news direction.
He uses Forex Factory for news timing and details, emphasizing that traders don't need to analyze news sentiment.
Examples from May 13 and May 14 demonstrate how to mark the candle before news and trade reversions or continuations accordingly.
Cautions include widening stops around market open due to overnight order volatility and limiting trading to morning hours when volume and edge are higher.
The strategy prioritizes reversion trades for expected news and continuation trades for unexpected news.
News drift is explained as a phenomenon where prices continue moving in the direction of surprise news.

Chapters

What is the core principle behind JJ Simon's news trading strategy?

The core principle is the fair pricing theory, which assumes that expected news is already priced in, so trades focus on price reversion to the pre-news level.

How does JJ Simon differentiate between expected and unexpected news in his trading?

Expected news is forecasted and mostly priced in, leading to reversion trades, while unexpected news causes new fair prices and is traded by following price continuation or drift.

What tools does JJ Simon recommend for timing news trades?

He recommends using Forex Factory to track US red folder news releases at 8:30 a.m. EST and to monitor tweets for unexpected news.

Full Transcript — Download SRT & Markdown

Speaker A

I made over a million dollars trading prop firms in the past 12 months. Here's my news trading strategy. As always, I'll start with the proof. I'll refresh each page. On Topstep, I have about $250,000 worth of payouts in the past 12 months.

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And they are all right here. You can slow it down and look at them.

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TradiFire, same thing, 136,000 total payouts. Next will be E8. E8, I have about $220,000 worth of total payouts.

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Lucid. I just finished the Lucid live account, so I have about $100,000 worth of total payouts on Lucid.

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FundedNext, 108,000. These are just the biggest sites that I use. I use some smaller ones, but not really worth showing here. 108,000.

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And then lastly, Alpha Futures, about 75,000. All right, so news is a very good way to identify fair price and manipulations away from fair price. So, it works very strongly with my fair pricing theory.

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Now, pretty much, if you haven't seen the fair pricing theory video, it's saying that we are trying to price the futures of Nasdaq. So, we're pricing actual companies, and then any moves away from a fair price, we want to trade back to

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fair price with a reversion. And the way we do that with news is to, first of all, understand the fair price of news.

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And this is going to matter technically if it's expected or unexpected. Um, we can just work with the expected news for now, which is pretty much red folder US impact news. That's going to be 8:30 a.m. EST, usually Tuesday, Thursday,

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sometimes Friday, Monday, whatever. You can use Forex Factory where I get my news. Just go to the news page, and then you'll see 8:30 a.m. We have USD red folder. And this is May 14th, May 13th, same thing here.

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And May 12th, same thing here. So, I'll just go over my trades for these 3 days, show you a little bit about how I use the fair price of news. Pretty much, the fair price of news is going to be the

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price before the news came out. This is because this news is planned. If the news is planned, they already have a forecast for it. Most of the time it's pretty much exactly on the forecast. If it's not, it changes a little bit, but

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for the majority of time it's going to be pretty much exactly what it's forecast to be. If so, that means the news has already been priced in. So, if the Nasdaq is trading, if the futures of NQ are trading at 30,000 for example,

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news comes out and then there's a sharp move away, this is what I would believe to be the fair price because news is already priced in. And then I would trade a reversion back to this price here before the news. You can also trade

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a continuation of the news if you're able to get in early enough. It's a lot more dangerous though. You would have to test that for yourself. It's only something I would add once you're trading multiple accounts at a time.

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Reversion is the main way to make money off of expected news. Unexpected news, I'll go over that at the end. And news drift is a commonly studied phenomenon that goes with unexpected news. Pretty much just got this from Google. What it

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means is financial asset prices continue moving in the direction of a surprise piece of news. So, unexpected news, pretty much just trading on a drift from that. So, if the price is here, unexpected news, this is a new fair price and I would

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just expect a slight positive drift if the news was positive. The good thing about trading news with my strategy is you don't have to analyze the sentiment of the news. You don't have to know if the news is good or bad. You just have

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to know if it occurred and if it was planned. Forex Factory will tell you all of that. It will also post tweets right here. Tweets are just a really good example of unexpected news.

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So, let's get into the three examples I have of the expected news and how I would trade reversions. So, first one, we have Thursday, May 14th if you want to test it. 8:30 a.m. We have two pieces of news. So,

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come over here to Thursday, May 14th and what I'll do is mark out the candle before news. So, 8:30 a.m. was news. And I'll mark out here the body of the candle before the news. So, this would be 8:29 a.m. EST.

Speaker A

Here, news comes out. This news was expected. It was forecast to be 0.7%. The actual release of this news was 0.7%. So, they already knew what the outcome was going to be. So, why would the fair price of Nasdaq futures change?

Speaker A

Well, they shouldn't. Therefore, this entire move down is unfair, and I want to trade it coming right back to this price here. Any entry for this is up to you. Personally, I just use a break and close above previous structure. It's

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what's worked best for me in the past, and I'm very easily able to see how many points I'm getting in my favor back to what I believe to be the fair price. In my other strategy, I also trade

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continuation of an opening candle, and obviously the open candle's red, but we make a quick continuation back up towards the fair price. So, you could pretty much enter anywhere along this stretch of green candles, and then you'll be making a plus EV trade back in

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the direction of the pre-news price. You can also enter before the market open, such as off this break of structure or maybe this break of structure. Just know it is very, very dangerous if the market is opening while

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you're in a trade. Just because the open has a ton of overnight orders, and it is totally possible that you're in a trade, you're in a winning trade, and the open just wicks you out before continuing back up. Just because the open is a sum

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of overnight orders, and this night here, for example, there was probably like 12 hours straight of majority selling. So, it is pretty likely that the opening trend for at least the first 10 to 15 seconds is going to have a lot of selling orders

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because obviously the overnight trend was mostly bearish here. So, just be careful. You want to widen your stop if you're in a trade. Sometimes go break even, but it is up to you and your backtesting what you would prefer to do. Or

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you can just wait until the market opens and prints its first green candle and just enter here off this break of structure back to this pre-news price, which we believe to be fair. If you want to take it a step further,

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this continuation up here would also be unfair, and you could trade another reversion back to the news price here.

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But, I would recommend don't look for too many reversions throughout the day. I'm usually done trading by 11:00 a.m.

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just because the volume sort of dies out, and the edge dies as well. Next, I will go over Wednesday, May 13th. Same exact thing, 8:30 a.m. Let's mark out the candle before the news. Here we have 8:29 to be right here.

Speaker A

That's pretty close. I just do the body of the candle. And this news was the actual was a little bit higher than expected, but on average it should not be too impactful.

Speaker A

Um, in this case it went down anyways. So, in this case, if the actual is very far away from the forecast, as you can see here, then actual greater than forecast be good for currency. Thankfully, you don't need to

Speaker A

know what this means. All you need to do is analyze based on the price action.

Speaker A

Okay, the institution has thought that this was bad for Nasdaq futures, and hence the dump. And then I would just treat the most recent consolidation and the market open price as fair, instead of this news candle right here. So,

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a little bit of a difference here. Thursday, red folder here, exactly as expected. Wednesday, pretty far off, so um in this case it's sort of unexpected in a way. Then, I'll just treat this consolidation and the 8:29 a.m. candle

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as the fair price. You probably have seen my strategy video at this point. If you haven't, that just pretty much explains why 8:29 is fair.

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Also, I will add, if it is very far away, as it is here, it is better to take continuations of these sort of trades, and you can just enter anywhere throughout the first candle as it's printing.

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And that would be a pretty good continuation trade for you. For the reversion, though, I would just enter back up into the pre-open p...

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Same entry criteria as usual for the strategy, pretty much off of any break of structure. Seems like the first one we get is here.

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And just trade back to the pre-open price. Next, I will do Tuesday May 12th.

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Here we have CPI. And pretty much as expected for all of them. So, this one I'm going to trade the same as Thursday. Treating the 8:30 8:29 a.m.

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candle as fair. So, mark that out right here. It's very small. Just make it like that.

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And we have this move up, obviously unfair. Want to trade on it coming back to this price here.

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In terms of the entry, pretty much same as always. Just get on get in on a break of structure. The first one we see is right here. And you're getting 70 points in your favor. The market does open

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here, so I would be a little bit careful just not wanting to get stopped out. Uh thankfully, the overnight was absolutely dumping, so majority of the orders were short, and it's coming back to here anyways, so very, very high probability

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win on it coming back to this price here. Perfect trade as usual. And this move up would also be unfair, so you could even double down and get a second trade in somewhere through this move down. Um entry would probably be up to

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you on if you're entering here, maybe here as well, or anywhere through this move down here. It does come all the way back down to the pre-news price, as expected, and then consolidates, so pretty much proving that this was indeed a fair

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price as it was exactly as forecasted, meaning the move away was unfair, and reversions are very live. I probably wouldn't trade a continuation because it came out as expected, but it is up to you if you want to add that into your

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trading. But, I would definitely recommend testing before implementing anything. Just understand that 9:29 is not always going to be the fair price because there can be unfair moves pre-market open. All right, so that is pretty much how we are trading news in

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general. First off, we have to understand the fair price of the news and do the continuation if it is extremely unexpected, and reversion if the news came out as expected.

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Pretty much, you can just test these 3 days and see how far away it was from the expectation, and then obviously how much it uh displaced away from what you think should be a fair price.

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Last thing I'll go over is the unexpected news and news drift. So, in terms of that, let me see if I can find an example from this morning, 13 hours ago from recording it at about 8:00 p.m.

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There was red folder news from Twitter about Iran and materials. So, that was this piece right here.

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And what you do with unexpected news means you want to trade, first of all, a continuation. So, entering anywhere throughout this candle as it's forming is very good. You don't even need to know the sentiment of the news. All you

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have to see is, "Okay, it's dumping, so I'm just going to get in a continuation." Next, instead of trading back to the pre-news price, because the move is fair, I would treat the most recent consolidation after the news to be the

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new fair price, which seems to be about here, and it's later confirmed here. So, it doesn't really look like there's too many opportunities to trade after this.

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Sometimes, though, it will break out of this consolidation and I'll trade on it coming back to the consolidation.

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Also, this specific day, the market opened right here and pretty much instantly came back to this consolidation uh after the news and just chopped around in here, proving that this is the new fair price instead of this back here. So,

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you have to be on top of Forex Factory, watching the news, finding out is this expected news, is it random news, all that sort of stuff, and use the calendar to identify red folder news throughout the week. It is Thursday

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right now, so nothing for the rest of the week, but in the week after that, you can [clears throat] attempt this strategy, try it on paper trading first. Remember, only US because we're trading Nasdaq futures. So, Thursday, we're definitely going to get

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to a very good day and be sure to check if the actual is meeting the forecast.

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Hopefully, that is a good trade for you next week. Last thing I'll mention is news drift. Pretty much, if news is red, instead of entering a continuation here, you'll enter a continuation as soon as it starts consolidating.

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Stop loss and take profit are arbitrary, up to your prop firm risk management, whatever you are doing. There are statistically optimal ways to do this, but in general, just trading in the direction of the news is always good

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because they're not able to price in the effects instantly, which is why I love doing continuations of unexpected news.

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So, I believe that's everything that I've needed to talk about for news, the expected news, unexpected news, reversions, continuations, fair price changes, news drift, all those sort of things. I know it's extremely complex.

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There's so many different factors to be at play for news trading, but hopefully that was a a very good introduction to news trading and how I've been using it personally. I would say it is my highest win rate trade out of literally all of

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the trades that I take is the reversion to pre-news price. Best example was definitely on Thursday of last week, Thursday, May 14th. If you want to go back and check that out. This was just a a very high win rate trade

Speaker A

that I took using the strategy. So, I always risk higher when my chance of winning is expected to be higher. It's something that you should apply to your trading as well. If you want to learn more about news drift and other news

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trading strategies, then you can join my free Discord in the description. Lots of people there talking about news and how to trade it. We're all watching Forex Factory on the side and if something comes out, we will let you know and see

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how we can trade it together.

Topics:news tradingprop firm tradingNasdaq futuresfair price theoryexpected newsunexpected newsForex Factorytrading strategyprice reversionnews drift

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