What You’ll Need:
Forex News Trading Triggersheet – This is where you’ll get the list of the news releases that I trade and the deviations I use to trade them. It is the key to short-term Forex News trading and frankly it took me years of painstakingly data gathering to compile this list.
Signup For My Newsletter & Read My News Analysis –
There are literally hundreds of news releases scheduled monthly, but we only trade 40 or so releases based on their track records… It’s a gigantic waste of time trying to trade ALL of them, and worse yet it could turn into a gigantic waste of money because market reactions to some of these un-tradable releases are just unpredictable! Therefore, I recommend to signup for my newsletter at the end of this article and read my news analysis BEFORE you get into any news trades.
Currency Strength Meter – This is a standalone software that displays an at-a-glance view of what’s going on in the market instantly. It is equivalent of analyzing 34 different currency pairs instantly, giving you a complete picture of the market. It is also an amazing tool for News Trading because it could help you to choose the best pair to trade at news time.
Also don’t forget, the new CSM version 3.0 comes with a news broadcasting feature, so if you don’t have a newswire service to get the actual release figure at the right time, you can now get the release directly from CSM!
- Forex Trading Account (Live or Demo): It goes without saying, you need a Forex account in order to trade Forex. If you don’t have a live account, you can start with a demo account first without risking any real money. Since trading platforms and how to open a Forex demo accounts are beyond the scope of this quick guide, I’d recommend you to visit
the Forex Education
section for more information on Forex Beginner Tutorials…
- Schedule Your Calendar: News releases are scheduled weeks ahead of time, therefore you should be aware of their schedules. Usually the busiest week is the first week of the month packed with Interest Rate Decisions and the famous U.S. Nonfarm Payroll Report. So planning ahead is always recommended, and you can get all Upcoming Tradable News releases of the week from this site.
- Read News Analysis: You should make it a routine to read my news analysis at least 15 minutes before the scheduled release and prepare to trade the news. I usually publish these analyses 24 hours before the schedules, and you can access them by clicking on the link on the Upcoming Tradable News list, or you can access them directly through the Currency Strength Meter 3.0
- Get Ready To Rumble! It’s the news release time, you’re filled with adrenaline! Remember, follow the trading method recommended in the analysis and trade ONLY when the deviation is hit. I recommend to stay out of the market unless you know what you are doing.
- Rise And Repeat: That’s right, since news releases are scheduled monthly and quarterly, they will repeat month after month, year after year. If you follow the basics, you’ll do just fine.
There are three methods to news trading, the Pre-News, The Spike Trade, and The Retracement Trade.
The Spike Trade:
- We wait for the news release to come out. Based on the release number we enter the market immediately either with a Long or a Short position.
- We try to catch the initial spike move, or part of the move.
- We will put our Stop/Loss 15 pips from the pre-release price and our Take/Profit at the maximum expected range based on the report and its historical data.
- This type of trading requires that you react fast enough to the release and use a broker that gives you good fill during news releases.
Watch Live Recorded Videos Of Spike Trading In Action
The Retracement Trade:
- We wait for the news release to come out. Based on the release number we will determine “where” to get into the market.
- Usually we will wait for the market to come back within 10 to 15 pips of the pre-release. Depending on the actual deviation.
- We will put our Stop/Loss 15 pips from the entry price.
- We will take profit at least 25% of the position when we get 10~20 pips of profit, and at least 50% of the position when we retest the top or the spike.
- This type of trade is safer than trading the spike, but sometimes we might not get a retracement at all or big enough and miss the trade altogether.
Watch Live Recorded Videos Of Retracement Trade In Action
The Pre-News Trade:
- We enter the market 5 minutes before the news release. •We base our entry on market sentiment and fundamental trend of the currency pair.
- We will always trade the direction of the Technical Trend.
- If the news release goes our way, we can make the entire move. If the news release goes against us, we might have to endure the initial drawdown, but usually after the impact is over, technical trend will resume its course and give us an exit to break even or 10~15 pips of loss.
- This type of news trade is highly advanced, require that you understand the market trend and market sentiment. It is NOT recommend for ALL news events. Only selected few.
Watch Live Recorded Videos Of Pre-News Trading In Action