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.
Trading on Forex news uses tools such as an economic calendar and a news feed, the first is a source of information about the release of future news, the second serves directly to track the result.
The whole trading system is as follows: you first find the most important events for your currency in the economic calendar, and then wait for a message to appear in the news feed on the website of your broker or one of the news agencies.
If the information is positive in relation to the base currency in the currency pair, then most likely the price will go up; if a negative message is published, it will almost 100% cause a decrease in the exchange rate.
In this case, you 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 increase, therefore it is advisable to mainly focus 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 the values of indices of the state of the economy, changes in the rates of national banks, the level of inflation and unemployment.
The most important events are highlighted in the economic calendar.
But we should also not forget about events that are chaotic in nature - natural disasters, terrorist attacks, statements by politicians and financiers. Such messages appear on the websites of news agencies or television.
When opening a transaction, always remember about the possibility of a rollback after a strong trend movement, so you should not delay its duration; you can be guaranteed to earn a couple of hundred points on one operation.
An interesting feature of trading on Forex news is that waiting for the news to come out in itself affects the situation on the market, especially if the forecast is known in advance. This statement can be 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 transactions, since news that contradicts forecasts always causes a greater change in trend than those that coincide with analysts’ forecasts.
Example of using news trading
Trading is carried out on the euro/dollar currency pair, open the Forex calendar and see. That a message about a change in the discount rate on the euro is scheduled for 14:00. We launch the trading terminal and open the news feed; if you wish, you can subscribe to it.
We wait for the event mentioned above and after the trend has moved in the right direction, we open a deal.
The order is closed at the first sign of a correction .
As you can see, trading on Forex news is really easy to use; even a novice trader can master it; the main thing is to know how an event will affect a particular currency pair.
At the same time, no one talks about a 100% guarantee of results, so do not forget to set stop orders when opening positions.