Many people know about this strategy of earnings, as trading on Forex news. Some point to their advantages, others to negative sides. But how to actually trade the news so that you can make good money?
To begin with, it is necessary to find an economic calendar, which tells about the release of news that have a real impact on the Forex market. Of course, you need at least a little understanding of the economy in order to understand how certain macroeconomic factors will affect currency fluctuations.
Obviously, for example, that the release of news in the United States will have an impact on the currency pairs with the US dollar, but what impact will this news have on the so-called cross rates? What will the hesitation be? Where does the price go when this or that information comes out?
The time when you will open a deal has a big impact. So, for a certain time before the release of the news itself, the price will go in a certain direction, which depends on the expectations of experts regarding the information that will be published. During the immediate announcement of economic indicators, the price may change its course or begin sharp fluctuations. Moreover, among these indicators, in addition to political events, are of particular importance:
– bank index rate;
– the rate of inflation;
– unemployment rate;
– economic indicators for individual industries.
News is not all received at the same time, but gradually, so for some time after their publication, the direction of price movement can change repeatedly and dramatically move in one direction or the other, without submitting to indicators or other technical analysis tools.
Taking into account all that was said above, it should be said – Forex trading strategies may be different. But in general, the following features should be noted, which should be taken into account in such trading:
– you need to understand the impact of news on the course;
– you must have a stable psyche to “sit out” all fluctuations, if you are sure of the price movement at which you opened;
– it’s better to initially place stop orders, since you simply cannot react to the movement as quickly as you want if you trade manually;
– It is important to choose the right time to open a deal. It is often better to open a deal before the news is released or to place orders in advance, which will allow you to earn more, although your risks will increase significantly.