Many Forex news traders are always asking:

How to sell on  news?

What’s the news that give a good impulse?

And also, some argue that news based trading does not need anything – you can simply trade on the news and everything will be OK. The essence of simple forex strategy “Trading Forex News” will be considered below.

Never trade all the news. There is a certain number of news that give a very good momentum and opened with a gap, or the price is rapidly moving in the same direction.

Here is a list of news for which you need to pay attention to:

UK:

  • Retail prices
  • BoE meeting minutes
  • Retail sales
  • GDP
  • BoE meeting announcement
  • PPI
  • Trade in goods
  • ILO
  • Unemployment rate
  • BoE quarterly inflation report

Germany:

  • ZEW economic expectations index
  • IFO business climate index
  • ECB press conference

Canada:

  • BOC meeting announcement
  • CPI
  • Retail sales
  • Unemployment rate

USA:

  • PPI
  • Retail sales
  • Existing home sales
  • New home sales
  • ADP employment
  • ISM
  • Nonfarm payrolls
  • Trading balance
  • CPI
  • FOMC meeting announcement

Australia:

  • RBA meeting announcement
  • Unemployment rate

When news is coming in USA or it is an USD currency news, mostly choose a currency pair GBPUSD, as well as USDJPY. Or before the very important news: EURUSD, USDCHF.

With the publication of news on GBPUSD, EURUSD – certainly trade the currency pair of the country, on which news announced.

When expecting news for Canada, Australia, New Zealand – choose the currency pair of that country against the US dollar: AUDUSD, NZDUSD, USDCAD.

Every week follow global economic calendar and be aware of the forthcoming news.

After you decided what currency you will trade, you should study the appropriate chart before the news is released. Better choose m1 or m5. If price is traded within a range, this is a right signal. Also have a look at older charts in order to understand the current trend on older charts. Then put 2 pending opposite orders below and above the price range (Buy Stop and Sell Stop). Also put 2 respective Stop Losses at a range of 10-20 pips from entry. Take Profit could be put as far as 50-100 pips from entry.

Once the news announced,  the price usually sharply moves to one side and if your orders have been exposed in time, your broker will open them at the current price and your trade should be automatically profitable. After that, you need to adjust your Stop Loss and remove the opposite Stop Order that was not taken by the market. You had better use a trailing stop to follow the market further.

That is the whole strategy of trading Forex news.

The main advantage of forex news strategy is a minimum risk and a potentially big profit.

However, there are a few cons:

  • Price could slip and you cannot control this
  • A server of your broker may not respond in time before the news or immediately after the news released
  • Some brokers are expanding spreads

And the most important: if the news is published against the current trend, the price will get a minimal move and then will go per the previous trend of the older chart.

So, this is up to you to decide whether to trade on news or not but in any case you should always be aware of global economic calendar and take into account all major news releases in your trading system.

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