Fundamental Trading

 

 

Many of the professional traders are most likely aware of good strategies for trading the news releases. We thought that informing even a new trader to these secrets would be well worth our time.

 

 

  1. Not All news releases make good trading opportunities.
  2. If the market is quietly trading in a narrow range for around 2 hours or so before the news release, this usually is a great setup for a trade.
  3. Around 3 minutes before the news release enter a BUYSTOP order 10 points above the highest price of the preceding narrow range.
  4. Then enter a HEDGE order 10 points below the lowest price of the preceding narrow range. If you don’t have hedging capacities you simply use a SELLSTOP order instead. Also enter a take profit order in both directions approximately 30 points beyond entry orders.
  5. Once you are filled and have at least 20 points profit, you may try a trailing stop and cancel the take profit order if this can be done quickly. Otherwise, just get out with your 30-point profit fill and wait for a little pullback for reentry.
  6. Now, very important: If the market fills you in one direction and then goes against you more than 10 points, close position as quickly as possible and wait to see if hedge order takes you into profit on the 'whipsaw'. It is very unlikely that there would be a double whipsaw.
  7. Keep in mind that after the market moves more than 20-30 points in one direction or the other after the news, it will continue in that same direction most of the time (Above 70% chances). The key to this type of trade is having all of your orders in ahead of the news.
  8. Do NOT try to chase the market AFTER the news is released. More often than not it would be a disaster. Also, as we mentioned before, straddle the tighter price ranges. If the price action is erratic and volatile leading up to the forex news, the chances of a whipsaw are greatly increased!

 

Lastly, when trying this strategy for the first time or two, only trade a USD ($) news release with your demo account until you are comfortable with the fast pace of this type of trade. We also recommend risking only small amounts (playing with mini-lots is probably a good idea before playing regular) of your capital, even after you become a proficient news trader.

 

All in all, the news trade can be very profitable, but you must look for the correct setup and clearly define and implement your entries and exits before the news is released.

 

PS: This type of trading is very common in the professional traders’ circle and the above strategy may be known to many pros. but now even you know it. Just make sure you apply the above points to the DOT. All GenuineFX Disclaimers on our website at: http://www.genuinefxonline.com applies for all our contents and all information is for information purposes only.