Please Share this Trading Strategy Below and keep it for your own personal use! Forex news trading is probably one of the most exciting forms of trading because it can produce instant profits and instant gratification. Phone Number Please fill out this field. Close any positions left one hour after the news. Features Circumvents spread widening and slippage problems. It can be used only for influential Forex news releases such as US GDP, non-farm payrolls, or interest rate decisions.
Jul 13, · Using a Forex news trading Strategy is probably one of the most exciting forms of trading because it can produce instant profits/5(3).
How to Trade?
If you look a the screenshot, this would be the middle black line. You set a take profit on both trades of 10 to 15 pips to be safe. You can go for more if the news is big, and you are going to get a bigger whipsaw, an interest rate decision for example. Now the important part is NOT to set a stop loss. Your take profit becomes the stop loss. Most traders will be trading this with a stop loss, you can trade it with a take profit instead of a stop loss. Price goes up, hits your take profit, price goes down hits your take profit.
As price is hitting other traders stop losses, its hitting your take profits. But because you are trading without a stop loss, it does not matter which way price goes first, you are not going to get stopped out, you are only going to get your take profit hit. Now there are a couple of important things you need to be aware of before you consider whether to use this type of strategy.
So you know the whipsaw is a high probability move. The market also has to be moving in a tight range before the news is released. This is VERY important. That way the stops are in easy reach of the whipsaw. If price has been going up, or going down before the release, then the whipsaw is less likely to happen. If you have the tight range that you need, you must enter as close to mid price as you can, so you are not exposed at the end of the range. If you are, your 10 or 15 pip take profit may not get hit in both directions.
Something else you can also consider to maximize your profit is to trade this strategy on multiple pairs. If the news is dollar related, you can trade all dollar pairs, if its euro related, you can trade all euro pairs etc etc. As long as you have the tight range you are looking for before the news release you can trade any pair. Trading multiple pairs will also spread your risk a little bit, just in case you do not get the whipsaw on all the pairs.
As long as you get it on the majority you can still make plenty of pips, and your take profit should get hit one way or another. If you are entering at mid price that should not be too hard to get. A lot of my trading is based on market logic, and this strategy is a logical way you can trade this type of news release.
I hope its been enjoyable reading, and made you think about the market a little differently. Traders are advised to investigate stop distance on their positions ahead of a data announcement as heavy as NFP. When spreads widen, stops can be triggered before prices begin trending and this can be disastrous for the trader. But, if prices then trend up pips on the EURUSD you have no position remaining even though you were right in the long position.
Traders generally want to investigate a minimum stop distance of 40 pips or more, and even then quick volatility may make the position vulnerable. Trading reversals are inherently dangerous in a normal environment; but when adding in the additional risk around news announcements, it can make this type of strategy very dangerous. Like the Slingshot strategy, traders want to go into the release with support and resistance levels identified.
Then, they wait for the news. In the immediate period following the news announcement, the trader can watch prices to see if those longer-term support or resistance levels come into play. And if they do, the trader watches to try to get an idea as to whether or not those levels are going to hold. Price action can be of huge help here. Traders want to see support coming in to the market at these longer-term levels before triggering a long position with a stop below support.
But if that support level does hold, the trader can begin scaling out once the position starts moving in their favor in an effort to capture as much upside as possible. Non-Farm Payrolls can be a game changer. A big beat or miss can stop a trend dead in its tracks and create massive reversals. In many cases, enormous volatility is created around the announcement with perhaps some slight follow-through thereafter; only to see trends resuming their previous trajectory.
This can potentially be a huge opportunity for longer-term traders to pick up or add positions at a much more favorable price than they would have otherwise been able to.
Joe can go into NFP looking to do some bargain-hunting. The next step in the process is to wait for the news to come out to see if prices can move up into this resistance zone so that Joe can enact an order.
Once price moves into resistance, Joe can begin looking to sell with a stop above the resistance zone. Traders can look at a shorter-term chart to look for price action indications of bullish or bearish reversal patterns to increase the potential effectiveness of the strategy. Interested in learning more about trading the news? DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Take a free trading course with IG Academy. Our interactive online courses help you develop the skills of trading from the ground up. Develop your trading knowledge with our expert-led webinars and in-person seminars on a huge range of topics. A demo account is intended to familiarize you with the tools and features of our trading platforms and to facilitate the testing of trading strategies in a risk-free environment. Results achieved on the demo account are hypothetical and no representation is made that any account will or is likely to achieve actual profits or losses similar to those achieved in the demo account.
Conditions in the demo account cannot always reasonably reflect all of the market conditions that may affect pricing and execution in a live trading environment. Downtrend Intact Amid Consolidation. Price action and Macro. Please enter valid Last Name. Please enter valid email. Phone Number Please fill out this field.
Trading Strategies Headlines
Forex News Trading Strategy — a trading system to profit from the high-impact news releases with low risk. A lot of my trading is based on market logic, and this strategy is a logical way you can trade this type of news release. I hope its been enjoyable reading, and made you think about the market a little differently. Our main focus here at Forex Fury is automated trading, but today I'm sharing with your a personal strategy that I use to trade news manually. This strategy is.