Three Ways to Trade Fundamental News:
2. Trade the Retracement
- 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.