Strategy and Tactics of News Trading

Fundamentals in the guise of news releases are an important aspect of trading. The constant onslaught of news and the impact it has on prices, especially in the short term, is a FOREX fact of life. The trader's mission is to minimize its effect by tactics and maximize its value by strategy.

Tip: Each time you sit down to trade, pull up your news calendar for the currencies you are watching, not any releases that occurred while you were away and any that will come out while you are trading.

I make a vertical line on my chart, marking the time when a news announcement is released.

See Figure below. I can track markets for several hours in such a way after a news release. Do not assume the full impact of news is made in the first few minutes directly after its release.

[caption id="attachment_13152" align="aligncenter" width="550"]Tracking the News Tracking the News[/caption]

News Trading

By Michael Duane Archer
Michael Duane Archer has been an active futures and FOREX trader for more than 35 years. He has worked in various advisory capacities, notably as a commodity trading advisor, registered SEC investment advisor, and branch manager for Heinold of Hawaii. He currently trades FOREX and futures and is involved in several technical analysis research projects.

Copyrighted 2016. Content published with author's permission.

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