Forex news trading is possible for any trader as long as you have the correct tools and indicators. We will show traders how to locate the most important forex news, then give them the proper tools and an indicator set for a complete forex news trading strategy.
Locating The Most Important Forex News
The exact times of scheduled news releases can be obtained from any forex news calendar. Here is a snapshot of a popular news calendar. Traders can see the news items with their exact release time, and the times can be adjusted to GMT time clock or local time. Forex news calendars like the one below are part of your tool set for news trading for locating high impact forex trading news. High impact news items are in red on this particular news calendar. We also have a world economic news calendar on our website.
Indicators For Forex News Trading
A good set of trend indicators and a live signaling system are also part of a great forex news trading system. After the news there can be volatility in the market for the any of pairs with the news related currency, or possibly on other pairs too. Before doing any forex news trading, traders need to know the direction of the major trends of the market, and you also need to know if at least one currency is consistently strong or weak before entering any news related trades.
Knowing the direction of the major trends and having some simple forex trend indicators is a good place to start with your indicator set. Here is a set of free forex trend indicators that can be set up on most forex charting platforms. When you place a forex news trade you will know if you are trading in the direction of the major trends.
Another powerful tool for your news trading would be The Forex Heatmap®, which is a real time currency strength indicator for forex traders. This would be another great indicator to have ready for trading forex news. It works for 8 currencies.
Forex News Trading And Money Management
If you enter a trade after some important forex news, always place a stop order to minimize any risk of loss. When the trade proceeds in the direction of the indicators and the trend, then scale out lots and move your stop to break even. Scaling out lots means you take profits on half of your lots and let the remaining lots continue to profit, with a break even stop on the remaining lots. Capturing profits from forex news trading and moving stops will increase your account balance and reduce risk to zero.
Forex News Trading Example
Let’s look at one forex news trading example. The forex news calendar indicates an important Canadian Dollar (CAD) news driver at 1230 GMT in the main trading session. The news happens and the CAD is consistently weak on all 7 pairs in the group in one direction using The Forex Heatmap®.
The heatmap specifies that the NZD/CAD has the best signal. You check your trend indicators and you see that the NZD/CAD is in an uptrend on the higher time frames, with no nearby resistance. In this case you have a very good situation for buying the NZD/CAD, or selling the CAD/CHF. With signals this strong a trader can enter a trade in the direction of the trend, and in many cases enter a short term term trade on the smaller time frames in the direction of the CAD weakness. Signals this strong and consistent generate great movement.
Conclusions About Forex News Trading – Trading after forex news drivers is possible with the right set of tools, indicators, and forex money management techniques. The techniques and tools presented here work well for the 8 currency groups and 28 pairs we track daily as part of our trading system.