Trading on the news .
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  • #1 Collapse

    Trading on the news .
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    It is known that the news is one of the most important influences affecting the Forex market and which contributes to the movement of markets very much especially
    economic and political news so there are a lot of married people who take this opportunity and trade on the news but in fact
    Trading on the news needs a strong strategy and needs to think very strongly before trading on the news because the market at news time does not respect any kind of analysis and moves very heavily and takes one direction and therefore it is very difficult to trade on the news .
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  • #2 Collapse

    News trading in Forex
    There are different factors that drives the price movements in the forex market and the economic news is one of the major factors that causes these price movements. The effect of the economic is very strong on the forex market especially when the news is a high impact news. Traders that trades the news needs to apply extra caution to the trading during this time due to the fact that the news causes a very high Volatility in the forex Market thereby exposing he traders to a very high risk of getting possible large losses within just a few minutes or seconds. Central banks meetings and the interest rate decisions are examples of very high impact news release that drives the forex market. Other examples includes non farm payroll, Federal Open Market Committee FOMC etc.

    Advantages of trading news
    There are some advantages that the news traders have in the forex market. Some of them are listed below

    1. The news traders can make very large profits within a very short period of time which can be as short as few seconds or few minutes and running into few hours too.

    2. The news traders does not have to trade always but rather they await economic news which gives them the opportunity to do other jobs and have much time for themselves

    Disadvantage of trading news
    Two of the disadvantages of trading the forex news are listed below

    1. The forex news trading is very risky, the trading Capital of a trader can be wiped out within few minutes or seconds if the Volatility is very high and the trading Capital is very low and likewise if a trader places the trade in the wrong direction based on wrong analysis and calculations.

    2. News traders can not trade at all time as they have to await news release before they can make trades. Therefore, their trading time is conditioned.

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    • #3 Collapse

      NEWS TRADING

      What is News Trading?

      News trading is the art of trading the financial market by using an economic event calendar/ data release schedule to exploit the strong surge of price to one side or another with the aim of scalping the market for a few pips or riding the momentum for as far as it can go. The calendar or schedule is a list made up of important things that can move the market sometimes temporarily before price returns to reverse but at times, it can act as the trigger for big continuation momentum. The items in the calendar are usually sourced from governments’ official website or associations so these are not just some random event but often a regularly occurring event varying from a weekly, monthly, quarterly or even yearly.

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      Forex trading is an activity that involves a lot of countries that use a floating exchange system so the calendar contains a lot of items based on countries and their economic calendar. So to shorten the list we will just mention the list from the countries among the major currency pairs namely (in alphabetical order) European Union, Japan, United Kingdom and United States of America. Also, on this matter we will talk about the high impact and medium impact news item.


      News Items List

      European Union
      The list below will affect EUR/USD and other EUR related currencies.

      ECB Monetary Policy Meeting Accounts
      It is a meeting conducted by the ECB that will provide guidance to the economists about short-term monetary policy about the direction of the interest rates and the movement of the Euro currency.

      ECB President Speaks
      This item is a speech delivered by the president of the European Central Bank. Anytime there is a decision made by the central bank regarding some economic issue will be delivered directly by the ECB’s president.

      ECB Press Conference
      This event is where the European Central Bank held a press conference where they announced the bid rate. The press conference is held in two parts. This is a monthly event and when the rate is changed you will likely see high volatility in the market but mostly in EURUSD.

      EU Economic Forecasts
      The forecast is an event scheduled where you will be able to see the direction of where the economy is heading, what the trends are and all of the important elements that affect it.

      EU Economic Summit
      The European Union consists of more than 20 countries in the european region and when they need to decide on important matters pertaining to any fundamental change or adjustment they need to have a meeting between the leaders of those countries. That is why this event is one to watch for and there is no fix date for this meeting.

      French Flash Services PMI
      The French economy is now the 2nd largest in the European Union and therefore, their data is important as it affects the EU bloc. This is the Purchasing Manager’s Index on the service industry and it’s done on a monthly basis.

      German Constitutional Court Ruling
      Constitutional Court Ruling is German is a very powerful body that rules over many aspects and it touches on the economy also. That is why this ruling is very important to follow. There is no fixed schedule for this event.

      German Flash Manufacturing PMI
      Germany is the largest economy among the EU country members and their economic data will have an impact on the health of the EU economy as a general. This data is released every month.

      German Flash Services PMI
      This is a survey on Purchasing Manager’s Index on their outlook on the economy specifically on the service industry. The data is disclosed every month.

      German ifo Business Climate
      This is a comprehensive indexing from many sectors in German economy and because the coverage is wide enough many analysts use this as a strong indicator in German economy. The index is done on a monthly basis.

      German Prelim GDP q/q
      Gross Domestic Product for Germany that counts the overall value of the economy from the manufacturing and service sector. The figure in the report is already adjusted with inflation. It’s a quarterly data so it has significance in the market.

      German ZEW Economic Sentiment
      Zentrum f&#252;r Europ&#228;ische Wirtschaftsforschung is a survey done to the German business world to depict the situation of the economy of Germany. This data is released every month.

      Main Refinancing Rate
      The announcement on the Interest rate decision for refinancing businesses that play a huge part on German banks. There is no fixed schedule for this but it is done 8x a year.

      Monetary Policy Statement
      Several times a year the European Central Bank will make adjustments or some changes to their monetary policy to reflect the challenges at hand. It is done 8 times a year.


      United Kingdom
      The currencies that will be affected by the news item below are GBP pairs but mostly the GBP/USD pair.

      Annual Budget Release
      The event is held to reveal the Annual Budget for the U.K. and this is a yearly event.

      Asset Purchase Facility
      This is the activity where the central bank of England decides how much money they will pour into their economy in the hope of influencing the interest rate on a long term basis. There is no fixed schedule for this event.

      Bank Stress Test Results
      A bank stress test is a test to determine whether a bank has what it takes and survives economic disasters. Minimum capital guideline is one of the examples to face this kind of scenario.

      BOE Gov Speaks
      A speech delivered by the Governor of Bank of England on issues surrounding the macro economy or other important announcements. There is no fix date on this event.

      BOE Monetary Policy Report
      This report is the basis used by the MPC (Monetary Policy Committee) for deciding whether to increase or decrease the interest rate or leave it as it.

      Claimant Count Change
      This data measures any change in U.K.’s unemployed people and it shows how strong or weak the economy is. The less unemployed people the healthier the economy is. The data is released on a monthly basis.

      CPI y/y
      Consumer’s Price Index measures the change of price of goods and services on a retail level. The data is gathered on a year on year basis.

      Current Account
      Current Account is a term used to describe the net value between export and import activity from a country and this covers the goods, services, income and money transfers. The data is compiled for a quarterly release.

      Final Services PMI
      Purchasing Manager Index is a diffusion index that includes surveys in the service sector nationwide. The service sector in the U.K. is a lot bigger than its manufacturing sector so it has a big impact on the economy. It’s done every month. This item has a big impact on price movement so you can take advantage on the already volatile GBPUSD pair.

      Flash Manufacturing PMI
      It measures the manufacturing sector’s level of activity by the purchasing manager. This works in tandem with Flash Services PMI though this one has less impact on the market. You can expect to see this data every month.

      Flash Services PMI
      This item will describe the index of purchasing managers that are surveyed. It’s done in the service industry which is the biggest contributor in the U.K. economy.

      GDP m/m
      This item is the monthly data that is annualized and it tells about the output of the whole economy in terms of manufactured goods and services rendered. This is a strong economic indicator and it’s released on a monthly basis.

      Monetary Policy Report Hearings
      This BoE event is scheduled quarterly.

      Monetary Policy Summary
      This is the summary of how the decision came to be and all other details that explains the decision and it’s scheduled every month.

      MPC Asset Purchase Facility Votes
      This event will reveal the vote to decide how much money they will pour in the market to purchase assets every month.

      MPC Member Speaks
      Speech from Monetary Policy Committee member.

      MPC Official Bank Rate Votes
      The Monetary Policy Committee will vote on the interest rate and shed some clues for future change (or not). Done on a monthly basis.

      Official Bank Rate
      The number shows the lending rate that the central bank uses as a benchmark to financial institutions. BoE announces this roughly every month.

      Prelim GDP q/q
      This is the preliminary Gross Domestic Product and you can see this figure once every quarter. GDP is a big data so you can expect some volatility when they announce this figure to the public every quarter.

      Retail Sales m/m
      This data is used to track the buying power on the retail level and it’s a good economic indicator to gauge the economic atmosphere. Ideally, the more people buying the healthier the country’s economy because it means people have money to spend. The figure is adjusted with inflation on a monthly basis.


      Japan
      All currency that is related to JPY will be affected. USD/JPY will be affected the most.

      BOJ Outlook Report
      This report came out as a result of how the Bank of Japan (Japan’s central bank) view the prospect of the country’s economy. This is an important report because Japan is a net export country. The report comes out every quarter.

      BOJ Policy Rate
      The Bank of japan will announce their interest rate.

      Monetary Policy Statement
      Bank of Japan also held an event to announce their policy that of course includes the directive on interest rate. Just as the U.S., Japan also holds this 8 times a year and there is no fixed set date for this.


      United States
      Every major currency pair in forex will be affected and also other pairs that are related to the USD.

      ADP Non-Farm Employment Change
      ADP is Automatic Data Processing Inc., and it is a metric used to track the change of the number of people employed excluding those hired in the farming and governmental sector. This is a monthly data and it is responsible for large moves.

      Advance GDP q/q
      GDP is a very important economic indicator in any country because it shows the strength of the economy of a country from all goods and services produced during a period of time and in this case it is quarterly. The figure is annualized.

      Average Hourly Earnings m/m
      The number that you will get from this data release will tell you the change of the wage (excluding the farming sector). You will find this data released every month.

      CB Consumer Confidence
      Conference Board Consumer Confidence is a measure of the confidence that consumers have on the economy of the country during a specific time (every month).

      Chicago PMI
      Purchasing Manager’s Index for the Chicago area is a measure of the economic health of the manufacturing sector.

      Core CPI m/m
      This type of Consumer Price Index measures price changes of the regular everyday goods that people. However, the list of goods excludes any food and energy consumption. The measuring is done once every month.

      Core Durable Goods Orders m/m
      This figure will track any change of the number of new orders of things that people use for a long time (but excluding cars and any other transportation vehicles). The data is a monthly data.

      Core Retail Sales m/m
      This is basically the same as the CPI where the data also tracks the change of price of goods and services however, it excludes food and energy.

      CPI m/m
      This data shows the fluctuation of price of goods and services on the retail level. Consumer Price Index is a monthly data.

      Crude Oil Inventories
      The number that you get is the data of the change of the crude inventory that U.S. companies have. Oil has a very big impact on the world economy and also the U.S. and this data is tracked every week.

      Fed Announcement
      Every now and then the Fed will come out and make an announcement on important adjustments or outlook or other things that need to be addressed. No specified schedule for this event.

      Fed Chair Speaks
      This is the event where the current Federal Reserve Chair gives a speech. No set date on this event.

      Fed Chair Testifies
      The Federal Reserve's Chair will give testimony on the monetary policy taken so far. No fixed schedule.

      Federal Funds Rate
      The Fed determines the interest rate that will be used by banks to borrow or lend to each other. This event is scheduled for 8 times a year.

      Flash Manufacturing PMI
      The Purchasing Manager’s Index is an index derived from the manufacturing industry. This is a monthly data.

      FOMC Economic Projections
      The Federal Open Market Committee is the body that makes projections/ outlook on many things that touch on subjects like unemployment, inflation, GDP and change in interest rate. It happens 4 times a year.

      FOMC Meeting Minutes
      This is the detailed written record of what’s discussed by the Fed during their meetings.

      FOMC Press Conference
      This event is when the Fed needs to make a conference, announcing important issues that affect the economy. Scheduled for 8 times a year.

      FOMC Statement
      The Federal Open Market Committee (FOMC) statement when the Fed usually announces the decision about the interest rate. The whole world follows this number because the U.S. is the benchmark of the global economy. The event is scheduled for 8 times a year.

      ISM Manufacturing PMI
      ISM is an abbreviation of Institute for Supply Management, it was previously called PMI (Purchasing Manager’s Index) and this thing is a measure of business activity in the manufacturing sector. It tracks the opinion on some business elements compared to the previous month. This is a monthly data release so you can expect to see this data every month.

      ISM Services PMI
      This one is actually the same with the one above but this time it’s from the service sector as compared to the manufacturing sector. It also attempts to measure the business climate during a certain period (the month before). This is also a monthly event so you can keep watch over this thing every month.

      Non-Farm Employment Change
      This will give you a description of how the employment is during the previous month. Obviously, the higher the number is the better the country’s business atmosphere. This is also scheduled every month.

      Pending Home Sales m/m
      This data tracks the number of home sales during the latest month. Home sales tells the buying power from the people, the more transactions the healthier the economy is. The data is compiled on a monthly basis.

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      Prelim GDP q/q
      This data counts all goods and services rendered in the country but in an annualized format although the data is announced every quarter.

      President Speaks
      The president of the U.S. at times will give important speeches that might have a big impact on the economy.

      Retail Sales m/m
      The number follows closely any change in the sales at retail level and this data is available every month.

      Unemployment Claims
      The number of individuals who filed for unemployment insurance for the first time during the past week;

      Unemployment Rate
      This item describes the number of unemployed people in the country that are looking for a job during the previous month. It is scheduled every month.


      Ok, so we're done with the Big 3 and now I'm going to mention another set of news items that affects the major currency pairs which includes Australia, Canada and Switzerland.


      All
      Every major currency pair will be affected by the events below.

      G20 Meetings
      The meeting of the country members of the 20 big economies in the world. Various topics are discussed during this series of meetings but mostly those that affect the economy. There is no fixed schedule for this event.

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      G7 Meetings
      The meetings of the 7 countries that mainly surround political issues in the world. Also no fixed schedule.

      Jackson Hole Symposium
      A symposium where important figures in the economy such as central bankers, finance ministers, academics from around the world to discuss issues on the economic condition. This is a yearly event.

      OPEC Meetings
      This is the meeting between the countries with big oil reserves. This meeting is important, especially to those who trade Crude Oil but it is also an important economic indicator because oil is basically used for industries around the world. This meeting is held 2x a year. OPEC is The Organization of Petroleum Exporting Countries.

      OPEC-JMMC Meetings
      In general, the events that only happen a limited time will have a great impact on the movement of the price so they are the best for news trading. The next best thing is the quarterly and then the monthly data. For the monthly data, NFP still holds the most attraction and all pairs related to the U.S. dollar will be impacted. JMMC is Joint Ministerial Monitoring Committee.

      Trading the news is very dangerous because usually this is the time where the market becomes so volatile and the price might surge or drop very fast leaving you with an order that is not what you originally wanted.


      Problems with News Trading.

      There are several well-known problems with news trading:

      Slippage will cause you to miss your price targets such as your entry point, exit point, take profit point etc. will be affected due to the frequent slippage.
      Spread is widening is very much common during news releases.
      Very low liquidity will cause you to not be able to enter or exit the market right now as the price feed move very fast
      Price is too hectic so your reaction time will be deemed useless in the face of the market movement.

      There are several ways to enter the market for news trading but many scalpers and news traders agree that mostly their trading strategy for capturing profit during this time revolves around breakout. So, if you are interested in Breakout Trading you can check out my other writing on that subject in this link below:

      Trade the Breakout

      If you like what you read please consider giving thanks by clicking the "Thanks" button on the left side below this post.

      You can also spread the word by sharing this post outside of the forum or to your social media and bring people into this forum.
      You only need to read THIS ARTICLE to make money from forex trading,

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      • #4 Collapse

        Trading on News in the forex market
        Trading on News in the forex market is regarded as one of the strategy traders use while trading in the forex market. Trading on News basically means the process where traders trade base on economic news that can influence the price of currency in the forex market. The most important news in the forex market that can have a great impact in the price of currency in the forex market is Non-Farm Payroll or the Federal Open Market Committee (FOMC).

        What is Non-Farm Payroll
        Non-Farm Payroll news can be regarded to as a type of report that all forex traders wait for in order to place their trades. It is one of the most important economic news that is the mostly of use to all traders. The Non-Farm payroll report is announced every first Friday of each month. It is economic news that is released in United States, this news is mostly followed by all traders because the USD is the most traded currency in the forex market.
        The Non-Farm payroll report comprises of statistics of change in the number of employees and also the unemployment rate. The Non-Farm payroll has huge impact on forex market and also big changes in the price movement shortly after the report is announced.

        Advantages of Trading on News
        These are some of the advantages of trading on News.
        1. One of the major advantage of news trading is that it gives traders the opportunity to make huge profit in the forex market when the news is just released.
        2. News trading can be done automatically.

        Disadvantages of Trading on News
        These are some of the disadvantages of trading on News.
        1. A trader can make a false assumption after the news has just been released which could affects the traders trade.
        Attached Files

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        • #5 Collapse

          News time trading
          dear forex mate observing one by one the characteristics of all tradable News is the first thing a News Trader should do and this requires cost determination willing to sacrifice time and willingness to learn and collect historical data for each news so someone who is wishy washy don't expect success as a news trader make News Trading as a complement to your trading system they are connected as in news merchants can utilize the news delivery to scalp in the market. Scalping is really an exchanging design the forex market which has to do with trading the market at a brief timeframe which can be as low as a couple of moments seconds to few moments or hours with the point risk management and most importantly your brief lengthy-time period goals an vital aspect of your exchange plan is stop Loss are most impotent for the trading on the news time Trading the news is a technique to trade equities currencies and other financial instruments on the financial market trading news releases can be a significant tool for financial investors
          harms of the news time trading
          this will prove for us so dangerous because we don't have any idea to analyze the news perfectly so it will happens that the market in the news time goes opposite to our trade direction taking so this may cause the end of our capital this may cause a big losses to us so the best is to wait until you see the impact of these news in market movements and after you determine market trend and analyze the impact of these news well you can enter the market News trading is a trading that is based on economic news and other news released The news trading can be used to trade the scalp or day trade depending on the type of news. The high impact news are more Volatile but most times their Volatility is short lived which makes it very good for the some other trades like the risky traders I have lost money in Forex while doing trading at the time of news news trading is the most risky type of trading

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          • #6 Collapse

            Trading on the news

            Forex trading is undoubtedly a very good business and at the same a very risky one. This calls for the need for every trader or every prospective trader to have a good understanding of the nitty-gritty of the business.

            Forex trading requires that one should understanding (with the willingness to apply) the principles of technical analysis, fundamental analysis, and market psychology.

            Technical analysis deals with the use of Price Action (PA) and technical indicators to detect the direction of the market. Fundamental analysis has to do with evaluating the impact of different types of news on different financial instruments or currency pairs to have a reliable future projection of the direction of the market. Market psychology has to do with handling the general sentiments of the market, the emotions, or the anticipated actions or decisions of all the participants.

            The focus of this article is however trading on the news or fundamental analysis. To trade on the news, one need to have a thorough evaluation of all the effect of the available news, former impact or the effect on the financial instruments of one’s interest or choice.

            To mention but a few, the news is Nonfarm Payroll (NFP), Interest rates, Consumer Price Index (CPI), Housing Starts, Purchasing Manager Index (PMI), Current Accounts, etc.

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            Also to trade on the news, one needs to have a working strategy (proved and tested) with a lower time frame from 1-hour to 1-min. The objective potentials (stop loss and take profit) must have been established. Therefore, as one trades on the news (having the calendar in place) one should be ready to make use of 15-mins and 5-mins time frames in taking cognate decisions. There should be enough practice of this for a reasonable period till one gains expertise on it.

            With all these in place, one is sure to enjoy profitability in trading news.
            dtvade Trading Journal


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            • #7 Collapse

              Trading on the news
              The forex news is one of the factors that affect the forex market just as you have mentioned, and there are many factors to look at when making news or fundamental analysis, so as to always get the right call whenever an event is released.

              • whats is forex news?
              The forex news is a fundamental event such as political and economic events that affect the market price in the forex market. The forex news can be seen on the forex economic calendar, which consists of the time and the level of its impact that should be expected.

              The forex news is considered a very dangerous method of trading due to a few reasons such as
              high volatility: the news usually comes with high volatility which means a trader has high chances of incurring a huge loss
              unpredictability: the news can be very difficult to forecast, and this means it's easy to get the news wrong.

              The traders with less experience are usually advised to avoid the news due to its risk, and likewise, traders that have problem with risk and money management might need to avoid the news

              if you will like to trade the news follow the below rules

              • perform fundamental analysis
              this gives you room to understand what to expect from the upcoming news, by fundamental analysis I mean monitoring of the fundamental or economic indicators such as the interest rate, Gross domestic product(GDP), Consumer price index, Unemployment rate, all this can give you insight on the health of an economy which can give you real knowledge of the direction of the news

              • always make use of stop-loss
              Due to the unpredictability of the news, make you set stop loss, and set it not too far from your entry, so as to make the potential loss minimal

              • take moderate risk
              when trading the news, it's not a time to increase risk but to reduce risk, let you risk be minimal.
              I believe if you can stick to all the above rules you will get to trade during the news a bit more comfortably

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              • #8 Collapse

                Trading the news

                Trading based on the news can be carried out before the release of news, during the time of news release, or after the release of the news. This trading prctice is favored by some traders for some reasons, while others avoid it for certain reasons. Any forex trading style may be favorable to some traders, but may not work for others, so it is important for a trader to apply only those trading styles that leads to better performance during forex trading. The pros and cons of trading based on the news are as follows.

                Pros of trading the news
                Trading on the time of news release can provide significant profits within a very short period of time, and this is the major reason why many traders indulge in this practice.

                A news trader do not have to wait all day to find a good trade setup that will provide profitable trade, but quickly enter and exit the market during news time in order to make profit.

                Trading on the news times does not require sophisticated analysis which is outside the expertise of many traders, and this makes it popular among less skilled traders and beginners.

                Cons of trading the news
                Trading on the news can equally lead to significant loss within a very short period of time, and many traders sustain heavy loss during news release as well.

                The technical analysis that works at other times often fails the trader during news times making it very difficult to predict price movement. Sometimes, the price moves in the opposite direction to that which seems to be favored by the news, further adding to the confusion. This makes news trading a very unpredictable venture, and equivalent to gambling.

                The price volatility at news times, spread widening, large slippages, and platfform freezing which sometimes occur, makes news trading very risky, and capable of wiping out the trading account of even an expereinced trader.
                Subscribe to: fanatic's GOLD and CL OIL Technical Analysis

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