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Big news in forex

Big news in forexGet the best parts of DailyFX. com in the new DailyFX App. Gold, Crude Oil Prices May Weaken Further on Hawkish Powell Speech. Gold and crude oil prices retreated as the US Dollar rose before a much-anticipated speech from Fed Chair Jerome Powell. Deeper losses may be ahead. Fed Chair Jerome Powell disappointed hawks at Jackson Hole, sending US Dollar prices lower as stocks rallied. Next, Yen rates may fall as the Nikkei 225 approache. Continue Reading. by Ilya Spivak ; Michael Boutros ; David Song ; Christopher Vecchio, CFA ; Paul Robinson ; Daniel Dubrovsky ; Tyler Yell, CMT ; James Stanley and David Cottle. The Dollar shed gains as the Euro and Pound retook some lost ground amid lackluster Fed minutes, political risk, and the Jackson Hole symposium. Next week, politi. Continue Reading. USDJPY appears to be on track to test the monthly-high (112.15) as the exchange rate initiates a bullish sequence off of the August-low (109.77). Continue Reading. The US Dollar shed windfall gains scored on the back of haven demand amid turmoil in emerging market assets. The core policy-driven uptrend may now resume.

Continue Reading. Gold prices are up nearly 2% after rebounding off key support - is a low in place? These are the targets & invalidation levels that matter heading into next we. Continue Reading. A big week in crude saw a massive drawdown in US oil stocks signaling high demand, while high prices may have lessened the need for a Saudi Aramco IPO. Continue Reading. Gold and crude oil prices retreated as the US Dollar rose before a much-anticipated speech from Fed Chair Jerome Powell. Deeper losses may be ahead. Continue Reading. Crude oil prices may stall after scoring the largest one-day gain in two months as commodities at large are pressured lower by a recovering US Dollar. Continue Reading. Gold prices may end a three-day winning streak scored as minutes from Augusts’ FOMC meeting strike a hawkish tone, boosting the US Dollar. Continue Reading.

Crude oil and gold prices rose after US President Donald Trump criticized Fed interest rate hikes, boosting US Dollar-denominated assets as the currency fell. Continue Reading. Gold prices rose as ebbing worries about trade war escalation between the US and China weighed on the US Dollar, boosting the perennially anti-fiat metal. Continue Reading. Crude oil and gold prices edged up as hopes for trade war de-escalation helped battered markets regain some composure. The respite may not last however. Continue Reading. Weekly currency forecast. Today marks the start of this year's Jackson Hole Economic Symposium, and a full slate of Central Banker interviews and speeches can keep volatility running as we wind down the summer months. Continue Reading. The US Dollar is closing in on its weekly lows, moving below the rising trendline dating back to April in the process. Continue Reading.

The US Dollar may trade broadly higher as Fed Chair Jerome Powell makes the case for further interest rate hikes in a speech at the Jackson Hole symposium. Continue Reading. Chief Currency Strategist. Fundamental analysis and market themes. Quantitative Strategist. Big data analysis, algorithmic trading, and retail trader sentiment. Head Forex Trading Instructor. Swing trading, chart patterns, breakouts, and Elliott wave. Sr. Currency Strategist. Fundamental analysis, economic and market themes. Christopher Vecchio, CFA. Sr. Currency Strategist.

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Fundamental analysis, news events, market reactions and macro trends. Junior Currency Analyst. Political economy, economic and market themes. Chief Currency Strategist. Fundamental analysis and market themes. Quantitative Strategist. Big data analysis, algorithmic trading, and retail trader sentiment. About your FOREX. com Demo Account. A demo account is intended to familiarize you with the tools and features of our trading platforms and to facilitate the testing of trading strategies in a risk-free environment. Results achieved on the demo account are hypothetical and no representation is made that any account will or is likely to achieve actual profits or losses similar to those achieved in the demo account. Conditions in the demo account cannot always reasonably reflect all of the market conditions that may affect pricing and execution in a live trading environment.

Which News Releases Should I Trade? Before we even look at strategies for trading news events, we have to look at which news events are even worth trading . Remember that we are trading the news because of its ability to increase volatility in the short term, so naturally, we would like to only trade news that has the best forex market moving potential. The reason is that the U. S. has the largest economy in the world and the U. S. Dollar is the world’s reserve currency . With that said, let’s take a look at some of the most volatile news for the U. S. In addition to inflation reports and central bank talks, you should also pay attention to geopolitical news such as war, natural disasters, political unrest, and elections. Although these may not have as big an impact as the other news, it’s still worth paying attention to them. When our economic guru Forex Gump is in a good mood, he usually releases an article on upcoming news reports that you can play and with trade strategies to boot! Check out some of his articles of this sort: Also, keep an eye on moves in the stock market . There are times where sentiment in the equity markets will be the precursor to major moves in the forex market. Now that we know which news events make the most moves, our next step is to determine which currency pairs are worth trading. Because news can bring increased volatility in the forex market (and more trading opportunities), it is important that we trade currencies that are liquid. Liquid currency pairs give us a reassurance that our orders will be executed smoothly and without any “hiccups”. Did you notice anything here? That’s right! These are all major currency pairs !

Since spreads widen when news reports come out, it makes sense to stick with those pairs that have the tightest spreads to begin with. Now that we know which news events and currency pairs to trade, let’s take a look at some approaches to trading the news. 5 Forex News Events You Need To Know. In the fast moving world of currency markets where huge moves can seemingly come from nowhere, it is extremely important for new traders to learn about the various economic indicators and forex news events and releases that shape the markets. Indeed, quickly getting a handle on which data to look out for, what it means, and how to trade it can see new traders quickly become far more profitable and sets up the road to long term success. Trading technical chart patterns can be extremely profitable but one must always be aware of the fundamental story which is ultimately driving the markets. Below we have listed five of the most important News ReleasesEconomic Indicators you need to know right now! Top 5 Market News Events. 1.Central Bank Rate Decision. Each month the various Central Banks of the world’s economies meet to decide over the interest rates they are responsible for. The decision they have to make is whether to leave rates unchanged, raise rates or lower rates and the outcome of this decision is extremely important to the currency of the economy and as such, to traders. An increase in rates is generally seen as bullish for the currency (meaning it will increase in value) and a decrease in rates is generally bearish for the currency (meaning it will decrease in value) whilst an unchanged decision can be either bullish or bearish depending on the perception of the economy at the time.

Whilst the actual decision itself is crucial, so too is the accompanying policy statement here the Central Bank gives it’s overview of the economy and how they view the future outlook. This is also where monetary policy is announced, which concerns vital matters such as the implementation of QE, which we explain thoroughly in our Forex Mastercourse. Some of the best trades you can make come from rate decisions, for example, since the ECB cut the EuroZone rate to 0.05% in September 2014, EURUSD has since fallen by over 2000 pips. The Gross Domestic Product is an important indicator of economic health in a country. A country’s central bank has expected growth outlooks each year that determine how fast a country should grow, as measured by GDP . When GDP falls below market expectations, currency values tend to fall and when GDP outdoes expectations, currency values tend to rise. As such this figure’s release is keenly observed by currency traders and can be used to cautiously anticipate Central Bank movements . When Japan’s GDP shockingly shrunk 1.6% in November 2014, the JPY fell sharply against the Dollar as traders anticipated further Central Bank intervention. 3.CPI (Inflation Data) Consumer Price Index is the most widely used inflation measure out of the various economic indicators. The index gives information about the historical average prices paid by consumers for a basket of market goods and highlights whether the same goods are costing more or less for consumers. Central Banks monitor this release to help guide them in their rate and policy setting. If inflation is seen to be evident, and moving beyond a certain target then interest rate rises are used to counter this.

In November 2014, Canadian CPI beat market expectations of 2.2% and came in at 2.3% with Canadian Dollar subsequently traded up to a six year high against the Japanese Yen. The unemployment rate of a country is crucial to markets given its importance to Central Banks as an indicator of the health of an economy. Higher employment leads to interest rate rises as Central Banks aim to balance inflation with growth and as such this figure draws huge market attention from traders. Alongside the Unemployment rate the two most important labour statistics are the US ADP and NFP figures released each month with the NFP taking prime position. This figure is so important we do an NFP preview each month giving you our analysis on the release and how to trade it. Given the market’s current attention to the likely date of a Fed rate hike, this figure is growing in importance each month. The ADP data is considered an important predictive tool for the NFP as it is released beforehand. Although the Central Bank meetings of all economies are extremely important, America’s Federal Open Market Committee meeting takes canter stage as the US Dollar is currently the world’s reserve currency . Each month the committee meets to set rates and to give it’s pronouncement on current economic conditions and the effectiveness of current monetary policy, casting an eye forward to expectations of future economic conditions and adjoining monetary policy. The committee is made up of members which vote at each meeting with “Hawkish” members those in favour of a rate rise and “Dovish” members those favouring a lowering of rates. The statement released by the Committee is keenly scrutinized by traders looking for clues as to how the Central Bank will behave in future and even the most seemingly inconsequential of terminology can cause large market moves, as seen recently concerning the Fed’s usage and then removal of the term “patient”, regarding rate hikes. FOMC meetings can cause huge market volatility as seen on March 18th 2015 when EURUSD spiked up 400 pips in a matter of minutes as markets perceived the meeting to be USD negative. These Central Bank meetings are where we also learn about any changes in monetary policy, such as the announcement of quantitative easing. This is extremely important to currency traders and we explain this topic fully within our course. Since the ECB announced their latest QE program on Jan 22nd of this year, EURUSD has fallen by over 600 pips.

The key thing with all economic indicators and news releases is not just what the actual release means but how the market anticipates the release and subsequently reacts to it, this is where the trading opportunities are created. It can be extremely difficult for new traders seeking to trade news events as the volatility and uncertainty can be overwhelming, fortunately we have a fantastic suite of indicators which are perfect for trading news events. Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. How to Trade Forex after a Major News Release. by Tyler Yell, CMT , Forex Trading Instructor. Position Trading based on technical set ups, Risk Management & Trader Psychology. Your Forecast Is Headed to Your Inbox. But don't just read our analysis - put it to the rest.

Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk. Your demo is preloaded with ?10,000 virtual funds , which you can use to trade over 10,000 live global markets. We'll email you login details shortly. You are subscribed to Tyler Yell. You can manage you subscriptions by following the link in the footer of each email you will receive. An error occurred submitting your form. Please try again later. Article Summary: News trading often brings the biggest moves of the month. Because of this, it’s no wonder that trader’s seek out high importance news events to try and catch a big move. However, if you don’t have a solid plan for trading the upcoming event, you’re likely better off not trading at all. Here is a plan to make sure you’re ready when a big move comes your way. “Don’t think about what the market’s going to do; you have absolutely no control over that.

Think about what you’re going to do if it gets there. In particular, you should spend no time at all thinking about those rosy scenarios in which the market goes your way, since in those situations, there’s nothing more for you to do. Focus instead on those things you want least to happen and on what your response will be.” – William Eckhardt. Have you ever wondered why markets move so much before a news release? Quite simply, it’s because of massive amount of traders are entering or exiting based on the news release and these traders want to do so at the price they feel is best. This causes a relatively large move immediately following a news release. Now, t rading the news is exciting . However, it’s also risky due to the large moves that follow a news release and because of these moves you need to be well prepared ahead of time if you’re interested in trading around big news events. First, it’s important to cover how to know when a big news event is coming out . Learn Forex: News Events Cause Forex Prices to Fluctuate Greatly. Chart Created by Tyler Yell, CMT. A Quick Primer on the DailyFX Economic Calendar. The DailyFX Economic Calendar is a key tool to help make you aware of when a High Importance event is coming out like the Federal Reserve Minutes or a Bank of Japan Rate Decision. To find the news that will most likely move the market, you should adjust the filter to only see High Importance events so that your calendar isn’t flooded with news that has little probability in moving the market. Once the filter is applied, you can begin looking for news events on currencies that you’re trying to find good opportunities in. Learn Forex: DailyFX Economic Calendar Can Help You Be Aware Of Market Moving Events. The Two Kinds of News Results You Should Be Aware Of. Now that you know what news events to focus on, you should know that all news releases are not treated equal and you should know the differences.

what the expectations for the numbers are. The expectations are important because the market has likely priced in the expectations so that should the news release is exactly at expectations you wouldn’t expect too large of a move. On the other hand , if news releases and the numbers are way out side of expectations, then you will see a massive move in which you should be prepared to trade if this style of trading fits your risk profile. Whether you’re trading a short-term or longer-term strategy, you need to know how news comes out in regards to expectations. If markets come out in line with expectations then you will approach the set up completely differently than if the release is completely outside of expectations. Release In Line With Expectations: Locate Key Price Levels to Enter Into a Trade. More than likely, you will see a reaction to the news event even if the numbers come in line. This can be because a flow of orders comes in the moves around prices but regardless of the reason this is your opportunity to have the market prove to you a level of support or resistance. If price touches that important level and holds, you can enter in a way so that your risk is still tight as the market continues business as usual. Learn Forex: When News Comes Out In Line, Look For a Good Entry on the Current Move.

Chart Created by Tyler Yell, CMT. There are two simple and objective tools you can use to find support or resistance so you can identify a high probability entry off a news event. The first would be Pivot Prices which are objective points of support and resistance based on prior price action. The other tool would be a trendlines which is a manually drawn line connecting price points where the trend continue. Release Outside of Expectations: Locate Breakout Levels to Enter Into a Trade. Learn Forex: Tr endlines Can Help You Catch an Entry as The Next Move Unfolds. Chart Created by Tyler Yell, CMT. If a trendline is truly broken, retested and then continues in the direction of the break, you have a clear trade with tight risk. Naturally, a trend line break would most likely happen only on high volatility caused by news coming outside of expectations. When an entry is triggered of such a move, you can place a tight stop below the trendline to prevent you from holding a counter trade if the trend resumes. --Written by Tyler Yell, Trading Instructor. Interested In Our Analyst's Best Views On Major Markets? Check Out Our Free Trading Guides Here.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. U. S. Dollar Weakens as Fed’s Powell Hints End of Policy Tightening Cycle is Nearing. The U. S. Dollar went for a wild ride last week against a basket of major currencies as traders reacted to political, economic and Fed news before settling lower. For the week, the September U. S. Dollar Index settled at 95.063, down 0.918 or -0.96%.The dollar started the week under pressure with some. Fed Policymakers Offer Mixed Outlooks. The week began with U. S. President Donald Trump saying he was “not thrilled” with the Federal Reserve under his own appointee, Chairman Jerome Powell, for raising interest rates. He further added the U. S. central bank should do more to help him to boost the economy.“I’m not thrilled with his raising. AUD Rallies on Turnbull’s Ousting, as Focus Shifts to Powell and the USD. Earlier in the Day:Economic data released through the Asian session this morning included July trade data out of New Zealand and July inflation figures out of Japan. For the Kiwi Dollar, the trade deficit widened from a revised NZ$4,210m to NZ$4,440m, year-on-year, while narrowing from a revised NZ$288m deficit to a. The USD Makes an Early Move, with Trade Talks and Stats in Focus. Earlier in the Day:Economic data released through the Asian session this morning was on the lighter side, with stats limited to prelim August manufacturing PMI numbers out of Japan. For the Japanese Yen, the prelim manufacturing PMI rose from 52.3 to 52.5, coming in ahead of a forecasted rise to 52.4.Looking.

FOMC Meeting Minutes and Trump to Battle For USD Control. Earlier in the Day:Economic data released through the Asian session this morning included 2nd quarter retail sales figures out of New Zealand and 2nd construction work done out of Australia. For the Kiwi Dollar, retail sales jumped by 1.1% in the 2nd quarter, quarter-on-quarter, which was better than a forecasted 0.4% No Surprises in the RBA Minutes as Trump Slams the USD. Earlier in the Day:It was another quiet session on the data front through the Asian session, with no material stats released, leaving the markets to consider the U. S President’s latest whine over the FED’s the 2 rate hikes through the year and planned move in September. While there were no stats. Geo-Politics and the USD in Focus, with no Stats to Influence. Earlier in the Day:It’s a particularly quiet start to the week, with no economic data released through the Asian session this morning, leaving the markets to ponder on the events of last week and what lies ahead for the week, with the U. S and China sitting down at the negotiating. Renewed Trade Talks, Easing of Contagion Fears Soften Dollar’s Bullish Performance. Two stories dominated the Forex news last week: financial turmoil in Turkey and the announcement of renewed trade talks between the United States and China. In between was a slew of domestic and foreign economic data. Primarily driving the price action early in the week was risk aversion with fears of. Inflation Figures and the Loonie in Focus, with an Eye on Trump.

Earlier in the Day:Economic data released through the Asian session this morning was limited to New Zealand wholesale inflation figures for the 2nd quarter, leaving the markets to consider what lies ahead as China and Canada prepare to return to the negotiating table to discuss trade terms with the U. S, Dollar Takes an Early Hit as Focus Remains on Turkey and Trade. Earlier in the Day:Economic data released through the Asian session this morning included July trade data out of Japan and July employment numbers out of Australia. For the Japanese Yen, the trade balance contracted from a surplus ?721bn to a ?231bn deficit, with the deficit coming in larger than a forecasted. UK Inflation and U. S Retail Sales Put the GBP and USD in Focus. Earlier in the Day:Economic data released through the Asian session this morning was on the lighter side, with key stats limited to August consumer sentiment figures and 2nd quarter wage growth numbers out of Australia. For the Aussie Dollar, The Westpac consumer sentiment index fell by 2.3% to 103.6 in August, partially. Trump and UK Employment Numbers Put the USD and GBP in Focus. Earlier in the Day:Economic data released through the Asian session this morning was on the heavier side, with key stats including July business confidence figures out of Australia, July fixed asset investment, industrial production and retail sales figures out of China, with finalized June industrial production figures out of Japan. Toxic Turkish Lira in A Free-Fall, Can Push EURUSD to $1.04. The collapse of the Turkish lira spreads its toxic influence on the European and EM financial markets. Asian bourses have been losing more than 1% on Monday morning amid the increased demand for safe-haven assets. The futures on S&P500 lose 0.1% at the start of Monday trades, falling for the fourth trading session in. Market Turmoil and USD Dominance Continues Amidst a Geo-Political Storm. Earlier in the Day:There were no major stats released through the Asian session this morning to provide direction for the markets, with geo-political risk was left to dictate market sentiment and direction for the major pairings through the session, with China new loan and FDI numbers not due out until.

Geopolitical, Domestic Events Drive Higher-Risk Currencies Sharply Lower. Geopolitical and domestic events drove most major currencies lower last week with the exception of the Japanese Yen which posted a modest gain. New Zealand DollarThe New Zealand Dollar closed sharply lower against the U. S. Dollar last week after the Reserve Bank unexpectedly committed to keep interest rates at record lows. Geopolitical Concerns Spike USD to Highest Level in More Than Year. The U. S. Dollar began the week trading steady-to-lower against a basket of currencies as some investors took to the sidelines ahead of Friday’s U. S. consumer inflation data. The early weakness was attributed to an easing of tensions over the trade dispute between the United States and China that had been. Can GDP and Manufacturing Production Numbers Save the GBP? Earlier in the Day:Economic data released through the Asian session this morning included July business PMI and electronic card retail sales figures out of New Zealand and prelim 2nd quarter GDP figures out of Japan. Later in the day, Japan’s tertiary industry activity index and China new loan figures are. How to trade forex on news releases. One of the great advantages of trading currencies is that the forex market is open 24 hours a day, five days a week (from Sunday, 5 P. M. EST until Friday, 4 P. M. EST). Economic data tends to be one of the most important catalysts for short-term movements in any market, but this is particularly true in the currency market, which responds not only to U. S. economic news, but also to news from around the world. With at least eight major currencies available for trading at most currency brokers and more than 17 derivatives of them, there is always some piece of economic data slated for release that traders can use to inform the positions they take. Generally, no fewer than seven pieces of data are released daily from the eight major currencies or countries that are most closely followed. So for those who choose to trade news, there are plenty of opportunities.

Here, we look at which economic news releases are released when, which are most relevant to forex (FX) traders and how traders can act on this market-moving data. Which Currencies Should Be Your Focus? These are the eight major currencies: 1. U. S. dollar (USD) 2. Euro (EUR) 3. British pound (GBP) 4. Japanese yen (JPY) 5. Swiss franc (CHF) 6. Canadian dollar (CAD) 7. Australian dollar (AUD) 8. New Zealand dollar (NZD) And here is just a sample of some of the more liquid derivatives based on the currencies above: 1. EURUSD 2. USDJPY 3. AUDUSD 4. GBPJPY 5. EURCHF 6. CHFJPY. As you can see from these lists, the currencies that we can easily trade span the globe. This means that you can handpick the currencies and economic releases to which you pay particular attention. But, as a general rule, since the U. S. dollar is on the “other side” of 90% of all currency trades, U. S. economic releases tend to have the most pronounced impact on the market. Trading news is harder than it may sound. Not only is the reported consensus figure important, but so are the whisper numbers (unofficial and unpublished forecasts) and the revisions . Also, some releases are more important than others; this can be measured in terms of both the significance of the country releasing the data and the importance of the release in relation to the other pieces of data being released at the same time. When Are News Releases Issued? Figure 1 lists the approximate times (EST) at which the most important economic releases for each of the following countries are published. These are also the times at which you should be paying extra attention to the markets if you plan on trading news releases.

What Are the Key Releases? When trading news, you first have to know which releases are actually expected that week. Second, it is key for you to know which data is important. Generally speaking, these are the most important economic releases for any country: 1. Interest rate decision 2. Retail sales 3. Inflation (consumer price or producer price) 4. Unemployment 5. Industrial production 6. Business sentiment surveys 7. Consumer confidence surveys 8. Trade balance 9. Manufacturing sector surveys. Depending on the current state of the economy, the relative importance of these releases may change. For example, unemployment may be more important this month than trade or interest rate decisions. Therefore, it is important to keep on top of what the market is focusing on at the moment. How Long Does the Effect Last? According to a study by Martin D. D. Evans and Richard K. Lyons published in the Journal of International Money and Finance (2004), the market could still be absorbing or reacting to news releases hours, if not days, after they are released. The study found that the effect on returns generally occurs in the first or second day, but the impact does seem to linger until the fourth day. The impact on the flow of orders, on the other hand, is still very pronounced on the third day and is observable on the fourth day. How Do I Actually Trade News?

The most common way to trade news is to look for a period of consolidation ahead of a big number and to just trade the breakout on the back of the number. This can be done on both a short-term basis within one day (intraday) and a daily basis. Let’s look at the chart in Figure 2 as an example. After a weak number in September, the market was holding its breath ahead of the October number, which was to be released to the public in November. In the 17 hours before the release, the EURUSD was confined within a tight 30-pip trading range. (A pip is the smallest measure of change in a currency pair in the forex market. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point.) For news traders, this would have provided a great opportunity to put on a breakout trade, especially since the likelihood of a sharp move at this time was extremely high. We mentioned earlier that trading news is harder than you might think.

Why? The primary reason is volatility. You can be making the right move but end up being stopped out or the market may simply not have the momentum to sustain the move. Let’s look at the chart in Figure 3 as an example. This chart shows activity after the same release as the one shown in Figure 2, but on a different time frame to show how difficult trading news releases can be. On November 4, 2005, the market had expected 120,000 jobs to be added to the U. S. economy, but instead only 56,000 jobs were added. This sharp disappointment led to an approximately 60-pip sell-off in the dollar against the euro in the first 25 minutes after the release. However, the dollar’s upside momentum was so strong that the gains were quickly reversed, and an hour later, the EURUSD had broken its previous low and actually hit a 1.5-year low against the dollar. Opportunities were plentiful for breakout traders but bullish momentum in the dollar was so strong that such a bad payrolls number failed to put a sustainable dent in the currency’s rally. One thing you should keep in mind is that, on the back of a good number, a strong move should also see a strong extension. Can I Avoid Getting Hit by Volatility When Trading News? The answer to capturing a breakout in volatility without having to face the risk of a reversal is to trade FX SPOT options. A number of different FX brokers offer a variety of exotic options. Exotic options generally have barrier levels and will be profitable or unprofitable based on whether the barrier level is breached.

The payout is predetermined and the premium or price of the option is based on the payout. The following are the most popular types of exotic options to use to trade news releases: A double one-touch option has two barrier levels. Either one of the levels must be breached prior to expiration in order for the option to become profitable and for the buyer to receive the payout. If neither barrier level is breached prior to expiration, the option expires worthless. A double one-touch option is the perfect option to trade for news releases because it is a pure non-directional breakout play. As long as the barrier level is breached – even if the price reverses course later – the payout is made. A one-touch option only has one barrier level, which generally makes it slightly less expensive than a double one-touch option. The same criterion holds – the payout is only made if the barrier is breached prior to expiration. This is a good option to buy if you actually have a view on whether the number will be stronger or weaker than the market's consensus forecast. A double no-touch option is the exact opposite of a double one-touch option. There are two barrier levels, but in this case, neither barrier level can be breached before expiration – otherwise the option payout is not made. This option is great for news traders who think that the economic release will not cause a pronounced breakout in the currency pair and that it will continue to range trade. FX SPOT options are a viable alternative for those who do not care to get whipsawed in the markets by undue volatility before they actually see the spot price move in their desired direction.

mw108 replies to: Big News. A few years ago, I met an arab guy in an online trading room who turned $1.000 into $100.000 within a few weeks, simply by trading news and not using a Stop Loss. Instead he doubled down every X pips the market went against him (martingale). In the end he came out as a winner all the time. Was quite fascinating to witness. So yes, it is possible. However, eventually he bet on the wrong horse at some FED decision and the follow up conference. He lost $90.000 within a week and only pulled the trigger when he was down to $10.000. Then he disappeared from the trading room. He really was one of a kind. Still nice to turn $1.000 into $10.000 in a short period of time though. But the morale of this story: High risk trades with Martingale strategy work, until they don’t. Expecting a “500 pips” move in one go is quite unrealistic though. The last time this happened was at the global financial crisis 2008. You can get weekly movement of 50-100 pips though, depending on the impact of the news.

Be more realistic and you may reach your goal. Since you said you have $10.000 available “to lose,” you can of course do the same: Simply trade without Stop Loss. But still don’t go “full retard” and “all in.” Never go “full retard.” $10.000 is a big buffer. Trade 0.10 Lot or if you want to be more conservative 0.01 Lot and double down every 25 or 50 Pips or so and TP at either a fixed sum or fixed Pips target. However, if you are new at trading, chances are still high that you lose it even with a big buffer. It is like sitting the first time on a beast of a motorbike. If you don’t know the power of that beast and can’t control it or your temper, chances are high you will have a fatal crash. 2 Ways to Trade the News. There are two main ways to trade the news: a) Having a directional bias. b) Having a non-directional bias.

Having directional bias means that you expect the market to move a certain direction once the news report is released. Consensus vs. Actual Number. Several days or even weeks before a news report comes out, there are analysts that will come up with some kind of forecast on what numbers will be released. This number is called a consensus . When a news report is released, the number that is given is called the actual number. “Buy the rumors, sell on the news.” This is a common phrase used in the forex market because often times it seems that when a news report is released, the movement doesn’t match what the report would lead you to believe. For example, let’s say that the U. S. unemployment rate is expected to increase. Imagine that last month the unemployment rate was at 8.8% and the consensus for this upcoming report is 9.0%. With a consensus at 9.0%, it means that all the big market players are anticipating a weaker U. S. economy, and as a result, a weaker dollar. So with this anticipation, big market players aren’t going to wait until the report is actually released to start acting on taking a position.

They will go ahead and start selling off their dollars for other currencies before the actual number is released. Now let’s say that the actual unemployment rate is released and as expected, it reports 9.0%. As a retail trader, you see this and think “Okay, this is bad news for the U. S. It’s time to short the dollar!” However, when you go to your trading platform to start selling the dollar, you see that the markets aren’t exactly moving in the direction you thought it would. It’s actually moving up! What the heck! Whyyyyyy?? This is because the big players have already adjusted their positions way before the news report even came out and may now be taking profits after the run-up to the news event. Now let’s revisit this example, but this time, imagine that the actual report released an unemployment rate of 8.0%. The market players thought the unemployment rate would rise to 9.0% because of the consensus, but. The market players thought the unemployment rate would rise to 9.0% because of the consensus, but instead, the report showed that the rate actually decreased, showing strength for the dollar. What you would see on your charts would be a huge dollar rally across the board because the big market players didn’t expect this to happen. Now that the report is released and it says something totally different from what they had anticipated, they are all trying to adjust their positions as fast as possible.

The only difference would be that instead of the dollar rallying, it would drop like a rock! Since the market consensus was 9.0% but the actual report showed a bigger 10.0% unemployment rate, the big players would sell off more of their dollars because the U. S. looks a lot weaker now than when the forecasts were first released. It’s important to keep track of the market consensus and the actual numbers , you can better gauge which news reports will actually cause the market to move and in what direction. A more common news trading strategy is the non-directional bias approach. This method disregards a directional bias and simply plays on the fact that a big news report will create a big move. It doesn’t matter which way the forex market moves. We just want to be there when it does! What this means is that once the market moves in either direction, you have a plan in place to enter that trade. You don’t have any bias as to whether the price will go up or down, hence the name non-directional bias . Trading Major News Releases. Video Transcription: Hey, traders. Welcome to video 22 of the Advanced Forex Strategies Course.

This is Cory Mitchell. In this video, we are looking at trading big news releases. This is a day trading strategy. So, we’re going to be using it on the 1, 5, and 15-minute charts. Brought to you by Investoo. com. So, news creates a lot of volatility. Most Forex economic calendars mark which events are high impact. When we’re day trading, we want to get out of all positions a couple minutes before a high impact news release. Holding through can mean big slippage if the price goes against you. So, here is an example of an economic calendar. This is the DailyFX economic calendar. You can filter it so that you just see certain pairs that you trade. I have mine set to see most of them.

They’re also rated in terms of low, medium, and high. So, low is really no concern. It’s not going to have much of an impact on the price. Medium may have some effect, and high are the ones that we definitely want to be out of before it comes out. Here is one that happened last night, the Australian rate decision, high impact event, especially if you are trading in Australian pairs. So, for example, the AUDUSD or the AustraliaNew Zealand dollar pair. You’d want to be out right before that announcement comes out, about a couple minutes before. There is potentially a trickle-down effect in some of these other ones. So, the euroUSD consumer index. If this highly affects the euroUSD, which it will, it may also have a trickle-down effect into some other pairs that involve the euro or the US dollar. So, even if you’re not trading the euroUSD or something, you might want to watch, even if you’re in the AustralianUS dollar, simply because when this affects the euroUS dollar, that could also affect other US dollar related pairs. Typically it’s going to have much less of an effect, and the main impact is going to be seen in the actual direct currencies that it would affect, so the Australian dollar as I mentioned, AustralianUSD, the AUDJPY. For euros, it’d be the euroUSD, euroGBP, Great British pound, and other pairs that are directly related to the euro.

So, get out before those high-impact news releases. I should point out if you are swing trading, you do not need to get out before high-impact news releases. Generally your stops and targets are a big bigger. Your entry orders are a bit further away from the price. So, the news releases aren’t going to affect you as much. So, you don’t need to get out. You’re just going to stick to your strategy, whatever you’re trading. It’s just day traders. When your trades are only lasting a few minutes, you may as well get out of all positions a couple minutes before these big releases. Holding through can mean big slippage if the price goes against you. When that news release comes out, volatility can disappear, and you have a big price move. So, even with a stop, this stop that you’re expecting may be . . . You could get a different price than that, and it could end up being a much larger loss than you expect. So, the news is going to come out. We’re going to see a big jump in volatility. Once we see that initial surge, and then we get a consolidation after that, then it just becomes another trending type strategy, albeit a volatile one. So, we can use any other methods we’ve learned to enter that trade. Prices move quickly around news. Don’t trade unless you have instant execution with your broker. So, if you are constantly hitting buy or sell, and you get what they call a re-quote, where it says, “The price has changed.

Would you like to accept it,” do not trade with those around news, with those types of brokers, simply because you don’t know the price you’re going to get. You may miss opportunities quite often, simply because you’re acting quickly to get a good price, and if you get re-quoted, you’ve basically missed that price. We can use limit orders to get in stops, targets, but we can also be nimble if the price turns sharply against us. Typically there is enough volatility to get out and then get back in if needed. Therefore, we can more actively trade in a lot of volatility and don’t just need to let the price hit our stop or target. Remember, in most of these videos I’ve said let the price hit your stop or target, no touchy-touchy once you’re in. This doesn’t apply as much here. Say, for instance, the non-farm payroll is a high-impact news release that comes out on the first Friday of the month. For the US dollar, comes out . . . That can cause the price to move 100 pips in 15 minutes. Whereas on a normal day in the euro or the British pound, you might only see 60 pips of movement. So, news creates a lot of volatility in a short amount of time, which means we don’t need to be as conservative because there’s a lot of momentum to take part in. So, if a price gets very close to our stop or very close to our target, we can just get out because we can expect that momentum . . . It could turn quickly against us or for us, so we want to act quickly, be nimble. If we’re in a profitable trade and it starts to go sharply against us, just get out, take the profit, look for another entry, because there’s a lot of opportunity. As opposed to on a normal day, it’s a little bit more slow moving. So, we tend to just want to let the price hit our stop or target.

So, this is May 2nd, British poundUSD 5-minute chart. We can trade news on a 1, 5, or 15-minute chart. It really doesn’t matter. On the 15, you’re going to get a few less signals, and on the 5, compared to the one-minute chart, just because there’s fewer bars that we’re going to look at. So, May 2nd was the first Friday of May. So, we’re looking at this first. This was the bar that the news was released on. About 41.4 pips in five minutes from the start of this. This is a five-minute bar. So, it moved 41 pips in five minutes. Then after that, we see this sharp move back, and it consolidates. So, we have some potential trades here. This doesn’t consolidate four bars right away, but we do have some other entries. The top of this bar . . . Remember, if we’re looking at momentum, as we’ve looked in the last few videos and anticipating the next move, the top of this bar equals a potential entry, or we can put out an order.

This is just a consolidation, based on this prior down move and the overall trend of the day. We are expecting further downside. So, we can see entering in this area would have just gotten filled. Price drops away. We do get that move lower, but this is where being nimble comes in. As we can see, the price drops, but it does not make a new low, indicating that some momentum has dried up. So, we have this move lower, a pop higher. When this fails to go, even if we had our target down here, on a big news release day, we’re probably not going to hold for the target. I would just get out basically as soon as you have that failure of momentum. Because with news, we want to be trading with the momentum. We want to be capturing the big swings. Once that big swing has subsided, then it’s just time to get out, take our profit, and then we can start looking for other trades. So, this, to me, right there, would have been the sign to get out. We have basically fails to make a new low or just gets that new low again, and we see that pop higher.

This is potentially a consolidation, but we wouldn’t view this as a move lower, simply because the downtrend is in question at this point. We had a very strong move down, but this one was much weaker, and we’re struggling to get past that first low. So, this would be the indication to get out. If we had placed our order up here in anticipation of that breakout, stop would have of course gone just a few pips above. We can also actively trade this. So, we had this green bar pullback and then a strong red bar, almost like an engulfing pattern. So, we could have gone short here. We also could have gone short on this engulfing pattern here. Those would have both . . . This one wouldn’t have worked out right off the bat, unless you got out very quickly, because it pulled back. This one would have worked out. You would have ended up getting out down here again. Any of the targets that we’ve discussed in prior videos you can use. So, that was basically the main portion of that move lower from the high, looking for a target down here, probably wouldn’t have gotten filled. But once we had this indication to get out, we could have.

So, we saw selling momentum slowing. Then, we have a little bit of a break to new highs over this area here. So, this is a potential consolidation. We have some breakouts higher, strong shift here. By this time, we’re more than an hour after the news, a couple hours. So these would just be now normal trades. Mostly the news-related trades are going to be within a couple hours of the actual news announcement. By this time, we are starting to get out of the news releases and could be just affected by other factors in the market. As this breaks higher, you’d be looking for just other trend trading strategies that we’ve looked at. Let’s see if we can find some other big news releases that have come out. Whether it’s big news or just some big moves, with the big news releases, we can anticipate that they’re coming out because we know the time and the impact of them. But when we also just have some big volatile moves, we can just trade them in the same way. When we have a lot of volatility, we are more free to just get in and out of trades with a bit more ease. So, we don’t necessarily always have to wait for the target. If we go to last week or previous week, and you can do this, you can go through prior weeks and see how these different events affected. So, Wednesday the 28th, in the Swiss . . . so right about there, we can see the big news release coming out. Make sure when you’re looking at the economic calendar to set it to your timeframe that you have on your chart.

That one is offset from mine, but you can always adjust it to fit the exact timeframe you’re operating off of. We have a news release here, strong buying, move lower. Potential is for still more upside, but we quickly fail into that. So, if we had gone long in anticipation of an upside breakout or a move back higher, once that didn’t materialize here, and we have basically a mini channel breakout. If we were in a long, we would have been looking to get out and sell short on this mini channel breakout. We can just flip our position like that because we’re much more likely to have these big movements which make it profitable for us to get out of a trade and flip into a new one. Even if we had gone long here in anticipation of this uptrend continuing, cut the loss as soon as this occurs, and then get short. Then, we would have been able to profit from the rest of the downside move. Here, we have a cup and handle-like or snapback type strategy, where this move down completely erased all that, all this prior up move. So, we can look to either take one of our more advanced entries near the top of this consolidation or just wait for a breakout below the bottom of the consolidation and profit from more downside. Once again, we can be very nimble with these if we set our profit target and it’s down here, and the price starts to rebound quickly.

If our target was down here, once this bar starts to rebound quickly, we know we’re in a volatile environment where this could fly all the way back up. So, we’re going to cut our loss quite quickly, as soon as that starts to happen. The only time we trade new highs and new lows is when we have very strong momentum with us. As soon as that momentum starts to go against us, we can cut our losses and get out very quickly. So, this would be an example of that here. Then, once we’re a couple hours after the announcement, we are just going to go back to our normal. We’ll see volatility goes back to normal. So, we would go back to our normal strategies, which are generally let the price hit your stop or target. But during the volatile times around news, we have a little bit more flexibility. You can get out of your trades a little bit quicker, flip your positions more quickly, just because we have that lot of movement to trade off of. So, only trade right around news if you have instant execution with your broker and can be reasonably sure of the price you’re going to get. Get out of current day trades before big news announcements. You don’t want to be holding through and then end up taking a much bigger loss than you expected. You can always get right back in once that news comes out. You should know what big news announcements are going to come out while you are trading. Get in following the news once volatility has subsided a bit, using any of the strategies we’ve covered. You can use your limit orders, target, stops as taught, but volatility gives us more freedom to get out with a profit or cut a loss if the price is running against us. So, as long as that volatility is there, we have that freedom. But as soon as the volatility overall contracts again to what it is on a normal day, that means the news event is over, and we go back to trading in our more conservative way and letting the price hit our stop and target.

Only risk 1% of your account in a pair. That way, even a string of losses won’t significantly draw down your account. Trading involves substantial risk of loss. Only trade with capital you can afford to lose, and make sure you’re testing this out before you implement it in the real world. So, get in there. Look through the economic calendar. Find out when some high - impact news releases are, and then just go through and demo trade it. See how you apply everything that we’ve learned in a very fast environment. Until next time, happy trading.


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