Forex News Trading. How Does It Work?

How to make money in forex news trading? Is it profitable?

Forex news trading is possible, and it is the most simple among all the strategies, because, on getting acknowledged with certain news, one can predict the rate with maximum accuracy. Forex trading on the economic news suits people who have their main job outside forex and cannot trade around the clock or at any time of the day, as what they can afford is about a half an hour a day.

If the news is weighty and influential enough, within a few minutes after it is published it can significantly change the rate, which will either go down or up. This indicator may be equal to 100+ points. An experienced trader knows how to trade on forex news releases. The most important issue for a trader who wants to trade this way is to find a good broker who will let him do so and will provide forex brokers’ news.

What trading on forex news is about?

News trading strategy implies the following methods:

Autoclickers. In the news trading start is taken by the software. This program is able to decide, when to enter, and chooses a direction. The trader should only specify the data necessary for the program to make calculations.

Hedging. This method implies that the trader opens two opposite transactions at a time (bid and ask). After the important news data is published, one of the transactions is to be closed stop loss, whereas the other will bring profit.

Straddle trade. Before the news is published, two pending orders are drawn up: one of them is below the price; the other is above the price. After the news is released, one of the orders will certainly bring profit.

Hearsay trade. The trader starts action in accordance with the presumed rate direction after the news is released. It depends on whether the news is positive for the currency or not.

Price bounce. Important new data influences the rate with a bounce; if the trader is aware of the news, he can enter the market expecting the ongoing price movement.

Do these strategies really work?

It is possible to rely on them,  but only provided that you trade with a good broker. Trading this way, the trader makes a profit, but the brokerage company loses money on the falling liquidity. Therefore, fifty percent success depends on the dealing center or the broker (read reviews on the forex brokers).

To track news, use economic calendar, don’t forget forex forecasts and special news indicator. If the news is not unexpected but planned, the trend is more stable and lasting longer.

How to choose the right currency pair?

Practice shows that most novice traders are limiting themselves to the pair EUR / USD. In fact, this financial instrument has a number of negative features...

10 Ways of Risk Management at Forex

The popularity of forex trading has always been high for a number of reasons. The main one is the outstanding profit potential, provided by a significant...

Where did bulls and bears come from?

Learn where bulls and bears came from and how this animal imagery caught on to be a central part of the financial markets until...


ABCs of leverage in the forex market

The usage of of such a specific tool related mostly to forex market as leverage is an opportunity to increase the trading volume at the...

Forex robots and how they work

In essence, there are two ways Forex traders can approach trading: they can either decide to analyse the market and trade on their own, or they can...

How to become a successful day trader

Anyone can become a day trader, learn how to do it quickly, how to manage the risk, and what to avoid to succeed in financial markets. Read the article...


Currency pairs. Base and quote currencies

Currencies on the FX market are always traded in pairs. In order to find out the relative value of one currency, you need another currency to compare. When...

Trading Checklist - Interview with Expert

As a country manager I get asked this and other trading questions daily. My position also means that I get to watch both successful and not so successful traders...

Everything you need to know about Forex

What is Forex trading? This article covers everything novice traders need to know about the industry, how to get started, how to grow as a trader...

  


Share it on:   or