Trading on Forex news, a simple strategy for profitable trading
This trading option, such as trading on Forex news, is simply extremely popular among most currency traders.
These strategies gained their popularity due to such properties as ease of use and a high level of predictability.
The essence of trading on Forex news is that after the release of an important message, you can predict with almost 90% confidence which direction the exchange rate of a certain currency will move.
To make money using the system, you do not need to have a lot of knowledge in the field of finance.
The main thing is to know how one or another fundamental factor affects the price of a monetary unit, and after it appears, open a deal in the right direction.
Forex news trading uses tools such as the economic calendar and news feed. The former is a source of information about upcoming news releases, while the latter is used to directly track the results.
The entire trading system works as follows: first, you find the most important events for your currency on the economic calendar, and then wait for a message to appear in the news feed on your broker's website or one of the news agencies.
If the information is positive in relation to the base currency in a currency pair, then the price will most likely go up, if a negative message is published, it will almost 100% cause the exchange rate to fall.
In this case, one should be careful, since news on the quoted currency in a currency pair has the opposite effect: positive news causes a decrease in the price of the currency pair, negative news causes its growth, therefore it is advisable to focus mainly on the base currency.
For example , the euro/dollar pair; we try to track only information on the euro currency; this approach will simplify the entire process.
When trading on Forex news, you should focus on the release of the following events: the publication of economic performance indices, changes in national bank interest rates, inflation and unemployment levels.
The most important events are highlighted in the economic calendar.
But we also shouldn't forget about chaotic events—natural disasters, terrorist attacks, and statements by politicians and financiers. Such reports appear on news agency websites or on television.
When opening a trade, always remember the possibility of a pullback after a strong trend movement, so don't delay its duration; you're guaranteed to earn a couple hundred pips on a single operation.
An interesting feature of Forex news trading is that the anticipation of a news release itself influences the market situation, especially if the forecast is known in advance. This is easily verified by observing the trend before the release of important news that is known in advance.
This fact should be taken into account when opening trades, since news that contradicts forecasts always causes a greater change in trend than those that coincide with analysts' forecasts.
An example of using news trading
We're trading the EUR/USD currency pair. We open the Forex calendar and see that a news release about a change in the euro interest rate is scheduled for 2:00 PM. We launch the trading terminal and open the news feed; you can subscribe to it if you wish.
We wait for the above-mentioned event and after the trend has moved in the desired direction, we open a trade.
The order is closed at the first sign of a correction .
As you can see, trading on Forex news is truly easy to use; even a novice trader can master it. The key is to know how an event will affect a particular currency pair.
At the same time, no one is talking about a 100% guarantee of results, so don't forget to set stop orders when opening positions.
