Forex News Trader Strategy


Before you start trading on a currency pair, it s important to understand the dynamics of forex news trading. This type of trading typically involves sudden spikes in volatility. To minimize the risk involved, you can set your stop loss as far before the news as possible. Another technique to minimize risk is to place a buy stop order above a key support level. If a breakout occurs, you can benefit from the reversal in price.

If you re unsure of what news to trade on, check out trading forums and websites dedicated to currency trading. You can also watch news channels for upcoming releases. Then, you can enter trades in response to these events. For example, you can trade after the release of US GDP, nonfarm payrolls, interest rate decisions, and PCE reports. After you have identified upcoming news releases, open two positions in your trading platform and monitor the market. Afterward, open the relevant chart in your trading platform and trade based on the volatility. Traders can also trade after economic data announcements, election results, and long-term trends following black swan events.

Traders should also stay away from previous readings unless the release is particularly important. Remember that prior readings are subject to revisions and can affect the market. To make the most of the news you can access, focus on the most important releases, wait for the release, and then dive into the trade. Generally, the reaction will last thirty minutes to two hours. It s best to hold your trade until it reaches your stop loss before making the final decision to enter or exit.

Lastly, remember that forex news trading has a high risk level. This type of strategy should only be used by traders who enjoy unpredictability. Because the market is always incorporated with important news, it can be extremely difficult to predict the direction of the market. A misstep in this volatile period can have catastrophic consequences on your forex portfolio. If you re a beginner at forex news trading, read up on some of the best trading strategies and make the most of your forex trades.

A successful news trading strategy must be able to make decisions based on news that is widely spread and influential. For example, a company earnings announcement may be accompanied by macroeconomic data. Political events are also significant drivers of market movements. Traders can benefit from the resulting volatility by using this strategy. So, if you re new to forex, the best way to start is with a low-spread currency pair.

The next important forex news trader strategy is to watch for key economic indicators. Although some of these indicators don t have immediate effect, they are still important. Some economic releases have a bigger impact than others. For example, the Non-Farm Payroll NFP release on the 8th of January, 2021 showed a decline of 140 thousand, while economists expectations had been 60 thousand. This difference meant that traders should be alert to these numbers as much as possible.

Author: My Forex Rebate
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