Announcement of important economic occasions and news, as a rule, bring forth to high volatility in the foreign exchange market. Thought-out approach to the trade and strict observance of the rules at this moment will give you no one great deal in a month.
For all the time as there is the Forex market it was created thousands of various strategies. Nevertheless, the Forex market is chaotic, dynamic, and constancy is not peculiar to it. Coined strategies either did not work at all or stopped working after some time of using them. After all, sooner or later any strategy will fail and need to be modernized. But from thousands of good Forex strategies we are able to find more than a dozen universal trading systems that will operate across hundreds of years. I wonder – what are these strategies? This is the tactics of the channel, trading on breakout, trading on the news, etc. Now we will consider the trade on the news.
Its meaning is effecting specific bargains during the release of economic news that are very important. It is important news! The strategy is based on strong price movements. Particularly important news – is the better part of news related to the U.S. and published in 13:00 – 16:30 GMT. There is some later news in the 17:15 – 18:15 GMT.
There are the news arising the great interest: about interest rate alterations of the world’s leading banks: ECB, Bank of England and the U.S. Federal Reserve; GDP, Non-Farm Payrolls – are parameters of the state unemployment outside the agricultural sector U.S., data about the trade balance, data about inflation, as they cause rapid price movement. Time of the announcement of above parameters is known in advance. 99% of the price will move sharply in some side. It is very complicated to predict the direction of price movement after the announcement of news.
Regulations of strategy “Trade on the news”:
1. Do not play with a large lot.
Undoubtedly, Money Management is vital to be respected always, and when trading on the news especially. If you are trading 1 / 10 part of your deposit, lower the risk to 1 / 15 or higher. And if you are trading with only 1% of the deposit, then nothing should be changed because this is a permissible minimum.
2. Do not open the orders before release of the news.
Too early opening of the position faces losses. Prior to the publishing of data keep yourself in the hands and do not hasten.
3) Set your orders correctly.
Get ready about 15 minutes before the announcement of the news: set at once 2 pending orders from the price price: Buy-stop and Sell-stop with indent 30-35 above and below the current price of the desired currency pair. Stop-loss must be short. Determine by yourself take-profit and Traling-stop. Thus, once you provide 2 versions of events. The most important thing – is not to set orders too close to the current price. Prior to the date of declaration of the news it will certainly be small swings of the price in both directions. And if your pending orders are closer than 20 points from the current price, they can be caught by market oscillations. Further – we are expecting for the announcement of news. If in 1-2 minutes after the announcement of data, no order has worked, we remove them. And if one order is opened, then delete the second instantly and watch how profit is increasing.
Strategy of “trading on the news” is not new. You may safely apply it, because it is time-tested. Only you should follow the basic rules when working on this strategy.
Nowadays people are searching for additional or even primary sources of income as never. World economy is still in tough condition, and to find a well-paid job is quite hard. And forex is one of the ways to make some money. To trade successfully one has to be aware of events on the market, so live forex news is of great help here. Those who don’t know where to receive fx news can use the Internet. Just type “forex news trading“, for example, in Google or other search engine and you will get many news sources to choose from.
Tags: currency exchange, currency trading, forex, forex news, forex trading
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