Forex Economic News Trading
Unlike stock markets, forex markets are open 24/5 except on the weekends. There is a continuous price action all day in the currency markets. Do you know this fact more than 90% of forex traders are speculators?
Forex markets have the tendency to react violently to the release of economic and socio political news. You cant predict when important sociopolitical event will be breaking news.
Fundamental economic news like NFP figures, the housing sales number, FOMC meeting etc all are released at a known time. Google Fundamental News and you will see lots of sites that provide this information.
These sites will give you the day and time when a major economic announcement is going to be made. Non Form Payroll (NFP) figures have recently become very important for USD pairs especially after the start of the recession.
Non Farm Payroll (NFP) figures are released at 8:30 AM EST on the first Friday of every month. Pairs like EUR/USD and others become very jittery just before the release of these figures. EUR/USD can shoot up sometime by 50-150 pips in 5-10 minutes.
Markets mostly stabilize within a few hours after the release of these figures unless these figures are of such a fundamental nature to form a new trend in the market.
Forex news trading is ideal for those traders who like a lot of action within few minutes. Here is one strategy that you can use.
Enter both buy and sell orders on for example EUR/USD at 10 pips above and below the price of EUR/USD just five minutes before the announcement of NFP figures.
Put stop loss of 10 pips and take profit of 40 pips on both orders. Immediately on the announcement of NFP figures, EUR/USD will react violently and either shoot up or down.
If it goes up by 10 pips, buy order will be triggered. Lets say, EUR/USD jumps by 60 pips. Your position will be automatically closed at 50 pips. You made 40 pips. Isnt it enough for a few minutes of work?
If EUR/USD goes down by 10 pips, the sell order will be triggered and you will still make 40 pips. However, sometimes the markets have a tendency to whipsaw. Practice this on your demo account first and make ten successful trades before going live. - 23162
Forex markets have the tendency to react violently to the release of economic and socio political news. You cant predict when important sociopolitical event will be breaking news.
Fundamental economic news like NFP figures, the housing sales number, FOMC meeting etc all are released at a known time. Google Fundamental News and you will see lots of sites that provide this information.
These sites will give you the day and time when a major economic announcement is going to be made. Non Form Payroll (NFP) figures have recently become very important for USD pairs especially after the start of the recession.
Non Farm Payroll (NFP) figures are released at 8:30 AM EST on the first Friday of every month. Pairs like EUR/USD and others become very jittery just before the release of these figures. EUR/USD can shoot up sometime by 50-150 pips in 5-10 minutes.
Markets mostly stabilize within a few hours after the release of these figures unless these figures are of such a fundamental nature to form a new trend in the market.
Forex news trading is ideal for those traders who like a lot of action within few minutes. Here is one strategy that you can use.
Enter both buy and sell orders on for example EUR/USD at 10 pips above and below the price of EUR/USD just five minutes before the announcement of NFP figures.
Put stop loss of 10 pips and take profit of 40 pips on both orders. Immediately on the announcement of NFP figures, EUR/USD will react violently and either shoot up or down.
If it goes up by 10 pips, buy order will be triggered. Lets say, EUR/USD jumps by 60 pips. Your position will be automatically closed at 50 pips. You made 40 pips. Isnt it enough for a few minutes of work?
If EUR/USD goes down by 10 pips, the sell order will be triggered and you will still make 40 pips. However, sometimes the markets have a tendency to whipsaw. Practice this on your demo account first and make ten successful trades before going live. - 23162
About the Author:
Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading; stocks and forex. Download Forex Scalping Cheat Sheets. Discover The Best Forex Signal Service! Read about Trend Forex System.
posted by X - Men @ 1:50 AM
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