There are several different approaches to trading the news.

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Firstly, some forex traders try to forecast what the result of the economic releases will be and place a trade prior to the release based on this. When predicting economic data there are sometime clues in prior economic releases. For example, in forecasting U. If the employment component of the three reports has increased from the previous month, it suggests that the number of new jobs created also increased.

A second strategy of forex trading the news is to wait until the figure has been released and trade based on how the market typically reacts to such a scenario. For example, if U. A third forex news trading strategy does not take the fundamental data into account and simply looks at prior price. In other words, the forex trader does not begin with a directional bias. A common strategy of this kind is to trade breakouts from the prior range as entry levels.

This can be done on both a short term intraday basis and a daily basis. This is done with the expectation that if price breaks out above 1. Bid-offer spreads typically widen before major news releases. This increases your cost in getting in and out of the market. Slippage is another challenge. Slippage occurs when you try to enter the market at a certain price, but due to the extreme volatility after a news release, you actually get filled at a worse price. Volatility is also a major challenge.

Even if you are right about the direction of the market, sometimes the swings are so wild that you can get stopped out of your position. Forex Trading the news presents an exciting opportunity for traders, given the frequency of releases and the volatility that is generated.

1 Minute Forex News Trading Strategy

Taking the time to study the forex market reaction to various releases will help you better forecast future outcomes and give you the market insight needed to trade successfully. Learn more about OctaFX Forex trading tools. Why Trade the News on Forex? You can start your FREE download today by clicking on the banner below:.

By downloading the platform now, it will also help you to follow through on the next few examples. The first step towards trading on news is to have access to the latest market news announcements. Fortunately, you can receive live market news directly from the MetaTrader 5 trading platform which comes directly from the Dow Jones newswire.

It's a fast and simple way to gain access to the right type of information you need to know about. A screenshot of the MetaTrader 5 trading platform provided by Admiral Markets showing the live market news tab in the toolbox window. The news here covers a wide variety of different topics and asset classes. You can also click on the Mailbox tab where the Admiral Markets team will also update you on any major news announcements that will affect the market and your trading. Alternatively, you can also visit the Trader's Blog page for the latest market-moving news analysis.

Once in the trading platform, you also have access to trading markets news as well. To do so, follow the steps below:.

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A screenshot showing the MetaTrader 5 trading platform provided by Admiral Markets with a trading ticket open on the chart. Did you know that you can also download an upgraded version of the MetaTrader 5 trading platform? To get started, click on the banner below and start your FREE download! While these are just a few of the different scenarios available for news-based trading, sound news based trading strategies will also include technical analysis to confirm the market condition and to find potential entry and exit points. For beginner traders, the conservative approach to trading the news is to wait for the news announcement and then confirm if a trend is developing by using technical analysis indicators like moving averages, wait for overbought or oversold conditions within that trend and use price action trading patterns as a turning point confirmation.

Using this as a basis we can formulate some rules to work with as a starting point to build upon. As an example, in the aftermath of the coronavirus pandemic in , governments and central banks initiated stimulus plans to help businesses. This led to a rise higher in global stock markets. Investors favoured technology stocks which would not only benefit from central bank stimulus measures but also would be largely unaffected by lockdown restrictions.

It's just one reason the Nasdaq NQ performed better than other stock markets during this time. The 20 exponential moving average blue line is above the 50 exponential moving average red line. The black vertical lines highlight periods of time the Stochastic Oscillator 5,3,3 is below the 20 level. In some cases, the market did push higher from here and in some cases, it went lower first. Further confirmations are needed from price action analysis and the use of a stop loss is essential to manage the risk if it turns out to be a losing trade and the market does not go higher but instead keeps on going down.

This merely serves as a starting point for you to develop upon. Did you know that you can trade multiple asset classes with Admiral Markets? Get access to the world's top markets today by clicking on the banner below and opening a trading account today:. As an example, during the coronavirus pandemic in , oil prices crashed lower due to a lack of demand as countries went into lockdown mode in an attempt to slow the spread of the virus. In the chart above, the 20 exponential moving average blue line is below the 50 exponential moving average red line. The black vertical lines show instances where the Stochastic Oscillator 5,3,3 is above the 80 level.

Interestingly, there were not many occasions this happened with the most significant fall from the overbought indicator occurring in late February. Traders may have needed to go down to the lower timeframe to find overbought conditions as the trend lower was too strong to find more than one overbought condition. From May , there were many instances where the Stochastic Oscillator was in overbought conditions. However, the market news had shifted at this point as OPEC already agreed to production cuts in order to help lift oil prices. This is why it is important to analyse the news and have a sound technical strategy.

In order to the trade the news, knowing the context is the most important step as that dictates what direction you are looking to trade. Did you know that you can test your trading ideas and theories on the latest market news, as well as the services provided by Admiral Markets by opening a FREE demo trading account?

By opening this account you will be able to trade in a virtual trading environment until you are ready for a live account! Admiral Markets is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8, financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today! This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or recommendation for any transactions in financial instruments.

Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks. We use cookies to give you the best possible experience on our website. By continuing to browse this site, you give consent for cookies to be used. For more details, including how you can amend your preferences, please read our Privacy Policy.

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June 28, UTC. Reading time: 19 minutes. In this article you will learn: Why trading the news is important How to trade the news with the right broker, platform and strategy The different types of news announcements you need to know about News based trading strategies you can start with straight away Where to find some of the best news analysis and resources to aid in your trading decisions How to trade the news in a virtual trading environment to test your ideas and theories by opening a FREE demo trading account with Admiral Markets UK Ltd!

Why trade the news? To reserve your spot in these FREE webinars, simply click on the banner below: Trading market news and the different types Understanding the different types of market news that influence trading and investing decisions is essential in building a news-based trading strategy or methodology.

Trading on news that is scheduled Scheduled news are announcements that traders and investors know about beforehand. Economic data points These are economic news announcements that are released at the same time every month and include news items like interest rate announcements, retail sales, inflation reports, employment reports and others. Trading market news announcements like these vary depending on the trader's style: Short-term traders would typically try to capitalise on the market volatility of a news announcement by trading around the release but special attention would need to be made around slippage and not being filled at your price levels.

Longer-term traders will analyse the news announcement to confirm the trend they are trading is still worthwhile or whether it could be time to exit or add to their position. Amateur traders would try to predict the outcome of the news to try and get in 'early' which is most likely to be a losing method in the long run.

Company earnings announcements Publicly traded companies tend to release trading updates to investors every quarter. This allows traders to view market news, instrument news, a global sentiment indicator, and a corporate calendar detailing earnings and dividend announcements, as shown below bottom left : A screenshot of the Admiral Markets Premium Analytics portal. Simply click the banner below to start your live account application process: Election announcements While the date of an election is known beforehand, the outcome is not.

Trading on news that is unscheduled, or unexpected Quite often there are unexpected news announcements or events that catch market participants off guard. Black swan events The term 'black swan event' was coined by statistician, scholar and former options trader Nassim Nicholas Taleb. Major shifts in supply or demand Most markets operate on a delicate balance of supply and demand. You can start your FREE download today by clicking on the banner below: By downloading the platform now, it will also help you to follow through on the next few examples.

How to trade the news The first step towards trading on news is to have access to the latest market news announcements. To receive the live market news, follow these steps: Open your MetaTrader 5 trading platform provided by Admiral Markets. Open the Toolbox window, by selecting View from the top menu.

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You will be shown a variety of different tabs. Click on News to receive the latest market news announcements live from your trading platform, as shown below. In the Market Watch window click the last line which has a plus button and text saying 'click to add'. Type in the market you wish to trade and the platform will update you with a selection of relevant markets. Select the market and press enter to confirm.