The Basic Principles Of The Trade On The News.
Publication of important economic occasions and news, typically, gives rise to high volatility in the foreign exchange market. Thoughtful approach to the trade and precise compliance of the rules at this moment will give you a lot of profitable transactions in a month.
For all the time as Forex market exists it was created numerous different strategies. However, the Forex market is chaotic, dynamic, and permanence is alien to it. Devised strategies either did not work at all or stopped working after some period of using them. After all, sooner or later any strategy will fail and must be upgraded. But from numerous good Forex strategies we can find more than a dozen generic trading systems that will operate across hundreds of years. I wonder – what are these strategies? This is the tactics of the channel, trading on the break, trading on the news, etc. Now we will consider the trade on the news.
Its essence is making specific transactions during the release of economic news that has a high degree of importance. It is important news! The strategy is based on strong price movements. Very 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 that many people get interested in: about interest rate changes of the world’s leading banks: ECB, Bank of England and the U.S. Federal Reserve; GDP, Non-Farm Payrolls – are indexes 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 indicators is known beforehand. 99% of the price will move abruptly in some side. It is very hard to forecast 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 needs to be changed because this is a permissible minimum.
2. Do not open the orders prior to outlet of the news.
Too early opening of the position threatens with losses. Prior to the announcement of data keep yourself in the hands and do not hasten.
3) Set your orders rightly.
Be ready about 15 minutes prior to the announcement of the news: set at once 2 pending orders from the current price: Buy-stop and Sell-stop with indent 30-35 above and below the current price of the necessary currency pair. Stop-loss must be short. Determine by yourself take-profit and Traling-stop. Thus, once you envisage 2 versions of events. The most important thing – is not to set orders too close to the current price. Prior to the date of notification 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 fluctuations. Further – we are waiting for the release of news. If in 1-2 minutes after the publication 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, since it is time-tested. Only you should follow the basic recommendations when working on this strategy.
Currently 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 forex market news can use the online network. Just type “forex news trading“, for example, in Google or other search engine and you will get many news sources to choose from.