Forex News Trading Strategy: Here’s A Consistently Profitable Forex News Trading System

let’s get started with the newsfeed strategy when a news event is released there is often a lot of irrational market movement, for example, this large spike occurred in the euro dollar immediately following the release of non-farm payrolls or NFP NFP is a measure of the number of people employed in all activities except agriculture it is released on the first Friday of the month and is historically the most market-moving news event for the dollar now what we are looking for with this strategy is the correction, if we look closely at the price action about 15 minutes after the news event we can see that the price begins to move back to previously traded levels take a look at the price action here after the release of the united kingdom’s CPI numbers there was a spike of about 80 pips and about 15 minutes later the price action begins to revert back to previous levels here’s the price action after German GDP numbers once again there’s a spike of about 45 pips, and then about 15 minutes later the price corrects back to previous levels, there are countless examples of this occurring and, I’m going to show you my way of trading it first I need to locate a market-moving news event this can be done by visiting the global economic calendar on daily FX comm and looking for any events rated as high then, I’m going to watch for a substantial market move following the news event now the critical step in this strategy is timing we want to wait 15 minutes before we do anything after 15 minutes have passed we’re going to trade in the opposite direction of the recent price action in anticipation that the price should revert back to previous levels we want to set a take profit around the price levels previously traded and a stop just outside the most recent high or low that was made after the news event came out placing a stop to limit potential losses is very important as there’s always a chance that the price action will continue in the initial direction of the move, let’s now look at how we can use this strategy after a news event like NFP after looking at the global economic calendar I can see that NFP comes out at 13:30 GMT on November the 7th, if we pull up a euro dollar chart for that time we can see that the euro dollar spiked up about 64 pips after that release, if we had implemented our strategy by waiting 15 minutes, and then selling here around a price of one point two eight to zero sure enough the price reverted back to the mean and we could have closed at our trade around one point two seven eight zero for a profit of 40 pips on this strategy we probably would have set our stop just above this high probably around one point two eight three five, so even, if the price action continued in an upward direction we would have been stopped out for loss of only 15 pips that’s a pretty good trade we risked 15 pips for the potential to make 40 pips or more.

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