How do you trade the news in forex trading?

Aug 25, 2011
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How do you trade the news in forex trading?

A lot of people have been asking on how to trade the news.
although i strongly do not recommend just trading based on news only, but here’s some pointer.
1. News are categorised into the level of impact. low, medium, high
just like the word high, high impact news can change the trend of the market. changing a downtrend into an uptrend and vice versa.
some medium impact news do have such capability too.
2. watch out for the upcoming important news weekly and daily.
and note which pair will the news affect.
3. if you are in a position and there will be an upcoming high impact news in 2hrs time.
take either half your profits first as the market will start going frenzy usually 2hrs before the news. shift your stoploss to breakeven. this way, if you are going long and the news impact reversed the market, you still got half your profits and broke even on the other half.
4. if you are not already in position before the news. wait for 10 mins after the news is out before entering. as in the first 10 mins, you will see price go spiking around and it happens alot of time when once the news is out, price goes spiking up real fast. you will be there thinking if you don’t catch the boat now, you are going to miss a hell lots of pips. and when you got in at the high, price went spiking even faster downwards. what the..?!
did this happen before to you? Don’t worry,it happens to every one.
this is how the market works.
one reason is that when the news is out, major players throw in a sum of money enough to move the market up. when people sees the market moving up, they jump in to push it even higher as they went in with the ‘fake’ movement. the major players then wait for price to go up high enough and then they step in to throw in large influx of money to short it. gaining great amount of pips in a short period of time. i know this happens, and it happens a lot of times.
the other reason is that, the market is based on sentiments. even though the news is positive, and people start buying it long. making the market move up. but if the general market feel that the news is not as good as expected or for some other reason. the big players and professional traders will start shorting it. leaving the losses to those who just traded on positive news.
therefore, one way to go around it is to wait for 10 mins after the news is out to evaluate the REAL market movement before entering.
but as always, i highly recommend adding price action confirmation to it. then you have a high probability winner.
i hope this article helps and leave me a comment to let me know how you feel or any additional input you would like to add are welcome.
Asia Forex Mentor,
Ezekiel Chew
 

tommy0921

Trader
Jan 3, 2011
29
1
17
Personally, I think beginners may want to read this books, which is about economics indicator. I don't know whether it's suitable to be posted here or not but the topic is appropriate. Good content, easy to read, and understand.
 
Apr 18, 2012
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When news comes out, especially important news that everyone is watching, you can almost expect to see some major movement. Your goal as a trader is to get on the right side of the move, but the fact that you know the market will most likely move somewhere makes it an opportunity definitely worth looking at.
 

Alchemist

Active Trader
May 2, 2012
74
1
27
England
www.alchemistforex.com
I personally would never trade the news. The degree of risk is too high for me to even consider it. I think that in order to do it successfully you would need to learn the fundamentals in depth. Also, this type of trading is strictly for experienced traders.
 

angelnish

Banned
Jul 24, 2012
29
1
0
Yes of course, trading the news is very important.

But in all seriousness, news is a very important part to the market because it has the potential to make it move!

When news comes out, especially important news that everyone is watching, you can almost expect to see some major movement. Your goal as a trader is to get on the right side of the move, but the fact that you know the market will most likely move somewhere makes it an opportunity definitely worth looking at.

One more tip: In the stock market, when you hear news before everyone else it is illegal. In the forex market, it's called FAIR GAME!
The earlier you hear or see the news, the better it is for your trading, and there is absolutely no penalty for it!"
 

eyeball

Master Trader
Sep 25, 2011
164
11
49
My suggestion here may sound convoluted and certainly contrary, but in my experience has worked very well over a protracted period of time. I am going to presume that you have an algorithm or some other systematic approach to the market that works reasonably well enough to produce profits on some kind of regular basis.( a big presumption in itself). If so, you have experienced, I'm sure, a breakdown of your systems viability ( profitability ) at times , especially approaching or immediately following a news release or some other secular (non-systemic, non-technical)event. The reasonable conclusion to draw is that "the news " or the fundamentals or the event has been strong enough to overcome the technical considerations of your system. This is known , in some circles, as non-systemic risk. Don't argue with it --just go with it. Apply your algorithm or system in line , never opposed to , the direction that the market is seeking until such time that you experience another systemic breakdown in the opposite direction and again are constrained to stop and reverse. This is all easier said than done and I would suggest trading with this approach on paper or by demo until your comfortable with it
 

nazmul.iiml

Trader
Oct 17, 2012
1
0
12
When news comes out and every one is watching at this time market movement is very fast and if you trade on time you can must be make a profit
 

Robert

Trader
Oct 24, 2012
53
0
22
Best way to trade on news is to enter 3 minutes before the release, close your eyes and open them after 5 minutes lol
 

candle7779

Banned
Sep 27, 2012
352
0
0
Best way to trade on news is to enter 3 minutes before the release, close your eyes and open them after 5 minutes lol
Really fun remark. Well maybe I agree with you. But if serious speaking. I've lost some money with news as to elections. So I don't want to repeat mistakes. :)
 

Master Forex IB

Active Trader
May 23, 2013
174
1
27
I trade on news On Tues day and Fridy . These two days are important to get good news and results. I make sufficient pips with news trading .It is more profitable than technicals. News trading is some times very risky when market not runs accordig to news release.
 

ituglobal

Master Trader
Apr 17, 2013
482
23
59
News trading has its own advantages and its demerits, so one would just need to devise an appropriate strategy to tackle it.
 

BlindFA

Trader
Apr 29, 2013
41
0
17
My news trading strategy is simple.

I walk away from my computer half an hour before and walk back half an hour later.

:)

Hahaha, that's the best answer I've read so far. I used to do that too to be honest. Sometimes when i have time and I'm around for the news I'll take a look and try to apply this strategy. But yea, it's pretty volatile and I'm always concerned with spreads flying around and slippage & all. You might be better off walking away for a good hour.
 

triplet

Active Trader
Oct 7, 2014
101
4
27
Trading the news can be very risky but it can be profitable . For a trader to be successful in news trading i think that calls for a lot of experience because you need to have a thorough understanding of the market movement.
 

Rambo35

Confirmed PaxForex Representative
Apr 22, 2013
909
23
32
Canada
I'm usually waiting for news to be released and market to calm down, than I'm reacting on it.