Forex news trading strategy can be difficult, but it doesn’t have to be! Follow this beginner’s guide and you’ll be trading the news like a pro in no time.
Why Should I Use This Strategy?
Many traders like news trading because it is a relatively low-risk, high-reward strategy that can be applied by those who don’t have time to conduct thorough market research. The simple buy on good news, sell on bad news strategy offers an easy way for beginners to stay in tune with short-term market trends. Learning how and when to implement a simple news trading strategy can help you develop your investing acumen and hone your skills as a day trader. For most investors, simply keeping up with forex news—as well as your country’s key financial reports—can offer valuable insight into what major indicators are driving global markets at any given moment. Market sentiment seems to determine trade direction more than actual economic data, so keeping track of what various industry leaders are saying about Guide to Forex Trading conditions can inform both your decision making and your overall investment philosophy.
How Does This Strategy Work?
In a nutshell, you’ll make a currency trade when certain news events are reported. You don’t need a lot of time or a lot of money for these trades; you only need to be able to watch an hour or two of news each day. To learn more about how and why it works, keep reading. If you’re looking for other strategies, check out my list of trading strategies . For example, if you want to follow trends and identify entries with solid risk/reward opportunities, visit my swing trading page. And if your thing is options , find what I have in store on that front over at my stock options page (I promise I’m working on an options guide too). With respect to forex news trading specifically though – let’s get started!
Common Mistakes To Avoid When Using This Strategy
The biggest mistake new traders make when using a news trading strategy is not timing their entry and exit points correctly. Once you have chosen which currency pair you want to trade, your next step is to monitor any related news. Any time there is a report about that currency pair, including rumors or speculation that are considered credible, enter your position. If no news has been released on your desired currency pair in 24 hours, close out your position. This ensures that your trades will be based solely on what happens after each piece of news comes out, making it easier for you to identify price trends accurately. And be sure to act quickly once you’ve entered a position; currencies typically begin moving against traders within minutes of a major event being announced, so if you plan to base your trades off of what happens as prices react after an event occurs, don’t wait around too long!
Where Can I Learn More About Forex News Trading?
If you’re serious about learning about forex news trading, a good place to start is in your local library. Look for books like Forex for Dummies or Guide to Forex Trading by J. Steven and David Hood. Another helpful resource is online discussion boards; although these can often be rife with misinformation, they offer an excellent forum for asking questions and gauging interest in particular strategies. (If you want to protect yourself from possible scams, stay away from any site that requires registration.) Before trying any strategy (whether on your own or from someone else), ask as many questions as possible of those who have already tried it: How did it work? Did anything surprise them? Were there any unexpected problems? Did they learn anything from their experience that could help guide others through their trades? Do not underestimate how difficult it is to trade profitably. Understand that almost every trader makes mistakes—and plan accordingly.