Most of profitable strategies for making money on the Forex market warn the player from entering the market during periods of publication of significant economic news in the country or the world. During these periods, the market is extremely unstable, changeable, volatile - in a short period of time, quotes can change their indicators many times over. The final price changes very quickly. However, such warnings should not be taken for granted. A sufficient number have now been developed effective techniques to trade in such extreme conditions. To get a quick profit, an interesting trading strategy is used on economic and other news.

How to trade on the news of the Forex market?

Advantages and disadvantages of news trading

Figure 8. News trading: its advantages and disadvantages

pros

1. Convenience in trading according to the economic calendar - the date, time, currency and country that the particular news concerns are registered here. There is a ranking of news.
2. News releases can cause strong momentum and price fluctuations. This is in the hands of a Forex trader, because at such moments he can earn quite a lot on the news.
3. When working with news, it is not necessary to delve into the study thoroughly. Everything you need can be found in the economic calendar.

Minuses

1. In reality, the situation on the market can develop in a completely different way, not in the way that sound logic suggested.
2. There are times when there is no reaction at all to a news release. This means that the market has already made some adjustments to the data, taking them into account, thanks to the statistics obtained earlier.
3. News trading has a number of technical problems. An abrupt price change causes the opening of orders that are completely unprofitable for the broker. Hence the appearance, as well as the expansion of the spread.

conclusions

The news trading strategy is a very profitable business. Making money on the news of the Forex market is an exciting and interesting activity. Of course, we should not forget that trading on the news is quite risky. trading strategy, because it is absolutely impossible to predict the behavior of the market. You shouldn't be too greedy. It is better to fix even a small profit.

In the format of this article, we will touch on the topic in more detail. fundamental analysis, namely, let's talk about one relatively simple tactical one - this is trading on the news.

What algorithms this method uses, what features and scope, how to correctly focus on signals and trade on the news in the forex market, we will try to cover all these issues in the format of this article.

It's no secret that during the period of important economic news, the market is subject to fluctuations and this is possible. The trader, focusing on the news, determines in which direction the price will move and open a deal to sell or buy an asset.

What is needed for correct trading on the news

For correct trading on the news, a trader needs to pay attention to the following important parameters:

• determine the most profitable currency pair and open its price chart in the trading terminal;
• analyze the timeframe;
• fix the time interval based on Forex trading sessions;
• to determine the moment of entry and exit from the market, it is recommended to use the Forex market events calendar;
• to obtain a reliable signal for opening a position, apply the correlation of currency pairs.

For trading during the news period, it is necessary to select the financial instrument for which the the largest number events in a short period of time and these news form the price movement in any direction that can be predicted.

The trading period on the price chart should be chosen based on the principle by which the trading process will take place: a long-term perspective or short-term trading?

As a rule, long-term trading is carried out on a price chart from D1 and higher, such a mechanism is characterized by transactions with a long time interval and during the opening of a position, the trader monitors the behavior of the trend with subsequent correction of his actions if necessary.

The short-term trading period is carried out on short price charts, which requires maximum concentration from the trader, especially during the release of important news. On the M5 timeframes, the price reaction during the news release is clearly visible.

The choice of the trading period depends on the currency pair. The main sources of obtaining important information is a calendar of Forex market events, a similar tool is provided by almost every broker.

You can follow the news without leaving the terminal using the "News" tab. You can use news indicators that display important events on the price chart of the trading terminal.

News trading- this is one of the most favorite strategies for both novice traders and those who already have some experience in the financial markets. The essence of this method is to open deals during the publication of important macroeconomic statistics and earn on the growing volatility and trend impulses that may form during this period.

Economic and political news is one of the most powerful agents of change in the financial markets. Reports of rising inflation, falling central bank interest rates, rising unemployment, lawsuits, or worsening internationalenvironments always cause excitement among the players. A particularly strong reaction can be observed in the currency markets, which include Forex. It would be surprising if a separate trading strategy did not arise on the basis of such a powerful factor.

In a market news trading strategy, the decision to buy or sell an asset is made in anticipation of the release of important economic information that improves or worsens its price and value. Basically, trading on the news is carried out in the Forex market, where the currency of the country where the news is expected from is against the basis.

Trading on the news has certain advantages and a number of disadvantages, which we will also discuss in this article.

The popularity of the news trading strategy is due to the fact that it does not require prior preparation - you can start working almost from scratch.

News trading basics

• First of all, you should always have calendars on hand.

The basic principle of news trading is to search for an event that can have a significant impact on a particular market. Usually in all calendars, events are sorted by importance. The more significant it is, the more volatility can be expected after publication.

The market reacts to each news in its own way:

Somewhere quotes are rising, somewhere they are declining. If you have fundamental knowledge of the country's economy and roughly understand what the unemployment rate, industrial production or refinancing rate announced tomorrow or the day after tomorrow, it makes sense to either sell assets at a convenient price (they may become cheaper tomorrow) or buy in reserve.

This is similar to the reaction of investors before the payment of dividends and after major corporate scandals, where stocks either rise in price or fall. In macroeconomic terms, much depends on the country:

It is very important to track the news in advance in order to know exactly what time this or that publication will be and what trading instruments it will have an impact on. Thus, you can make decisions in advance and even place pending orders to open long or short positions.

News trading includes:

• analysis of the economic and political situation;
• predicting upcoming news and their impact on the market;
• calculation of investors' expectations - direct competitors;
• predicting their actions when news is released;
• decision making and action.

Basic macroeconomic statistics

One of the main events that all market players are closely watching is the meeting of the central bank and decisions on.

The currency market reacts to this event in the following way. When the rate rises, the currency begins to rise. On a decrease, on the contrary, it decreases in value. If the rate remains unchanged, this is often also a bullish signal, although the momentum will not be as strong as if the rate had been raised.

Another important event worth paying attention to is the publication of quarterly data on. If this data diverges from the forecast, there may be momentum and expansion of volatility upon publication. However, it is worth remembering that in most cases, the results of this publication are already included in the price. The fact is that preliminary data on economic growth rates are usually published already in the next quarter. Accordingly, market players, taking into account all the other statistics published earlier, already roughly see the big picture.

In different states, these data are published in different ways. For example, in the United States, monthly statistics are considered. In the eurozone, the change in the consumer price index in annual terms is published.

In most states, it is customary to focus on an annual inflation rate of 2 percent. Therefore, if the values ​​of the business activity index greatly exceed this value, the central bank may tighten its monetary policy. Accordingly, one can expect an increase in the exchange rate. If the value of the consumer price index is significantly below the two percent annual rate, it is quite possible to ease monetary policy in the future. Accordingly, on expectations, the market may start selling the currency and its rate will decrease.

In general, two types of such an index are usually published - in the manufacturing sector and in the service sector (in the UK, you can also find an index of business activity in the construction sector, which reflects the situation in this industry, as well as in the real estate market as a whole).

The main ones include the dynamics of applications for benefits, as well as the so-called non-pharma or data on the number of new jobs outside the agricultural sector. Everything is quite simple here - the lower the unemployment rate, the better. Accordingly, if this indicator decreases, then the value of the asset/currency will grow. Conversely, if the unemployment rate rises, the asset/currency will decline in value.

Accordingly, the growth in the number of new jobs indicates that the situation in the economy is improving. If such indicators grow, then the asset/currency will also grow. With negative dynamics, we may expect a decrease in the asset/currency. This is especially visible on the American non-farms, which are one of the most significant indexes in the entire economic calendar as a whole.

These are far from all the data that can influence the fluctuations in the quotes of financial instruments. But they are basic. Trading on this data can be very profitable. But before you start working on the news, pay attention to the advantages and disadvantages of such trading. They will be discussed in the next part of the article.

News trading example

We talked about the fact that the market is more influenced by news from high importance, and this is true, but there are still situations where you can make money on news with more low importance when a lot of such news comes out at a time.

Today in the economic calendar there were data for the United States and all indicators were positive:

• The first the column with numbers is the actual value, the result published today.
• Second column - forecast
• Third column - past value.

We immediately went to and invested in the fall of the quote, that is, the fall of the euro against the growth of the dollar:

The option will close in 15 minutes. Look at the results:

The rate, as expected, went down, and we earned 74% of the profit from the investment amount:

As mentioned above, on stock market investors listen not only to global, but also to local asset-related news. The Forex market, pegged only to currency pairs, is limited in this regard, but allows for high volatility and allows for both low- and high-risk transactions on the news.

An example serves the situation in December 2015, when the head of the European Central Bank Mario Draghi made a statement on the difficulties overcome by Europe. When they announced a decrease in annual inflation to 0.1% (from 0.3%) and a decrease in the forecast for 2016-2017 to 1.1 and 1.7% (instead of 1.5 and 1.8%, respectively) - the key European index Euro STOXX 60 grew up on 1.4% . HoweverThe single European currency fell against the dollar from 1.13 to 1.11 per US unit, and the reason was the actions of the interstate regulator. The refinancing rate was kept at 0.05%, margin loans - 0.3%, interest on deposits was reduced by 0.2%. This made the euro less profitable against the dollar, and led to massive selling.

• In December 2015, unemployment in the United States remained at the same level, although the number of jobs amounted to 290 thousand against 185 thousand according to the plan - the euro exchange rate against the dollar fell by 0.06%.
• At the same time in China they started talking about the decline in industrial production, and in a month the yuan fell from 6.45 to 6.58 per dollar.
• In January 2016, after Francois Hollande's statement about catastrophic unemployment in France (over 10%), the yield on government bonds of the Fifth Republic fell by 3%, but immediately after the introduction of an emergency plan to save the economy, the value of securities increased by 5%.

Forex news trading example

Today we released positive news on the British pound:

At this time, the Japanese stock exchanges are closed and cannot influence the market, so the rate especially went up. We opened the broker again and bought an option UP for 6 minutes:

When the deal closed, the broker showed the results:

Hedging

One of the most common methods of news trading is hedging, which is used before significant economic events. The popularity of this strategy is due to its simplicity.

The essence of hedging is that before the release of the news, two opposite positions are opened - for sale and for purchase.

At the moment the message appears, the price of one of the transactions rises sharply, as a result of which the trader receives a profit that exceeds the losses from the unprofitable participant in the pair.

Pros and cons of news trading

pros:

• Working with the news, it is not necessary to study technical or fundamental analysis. All the necessary information is presented in the economic calendar;
• Important statistics cause significant momentum and increased volatility. Therefore, a trader can earn significantly more by using this style of trading in his work;
• The economic calendar shows the time, date, and the country or currency to which the news relates. All statistics are ranked in order of importance, which helps traders make the right decisions.

Concerning shortcomings, they are also present:

• Not always the situation will develop as elementary logic indicates;
• In some cases, there may be no reaction to the news at all. This is due to the fact that the market has already taken into account the data due to previous statistics. For example, during the quarter, the business activity index constantly showed a decline. This may indicate that there will also be negative dynamics in GDP growth rates;
• News trading often faces various technical challenges. This is especially true for Forex. The increase in volatility often leads to the fact that the trader opens positions that are not profitable for the broker. In this regard, slippage may occur for companies with a fixed spread or significant spread expansions for a company in which it is not fixed.

When trading on the news, it is important:

• be able to distinguish between a market fall, its reversal and correction;
• understand which of the news will have a long-term impact, and which will not;
• see informational occasions that have a direct and indirect impact;
• ignore false signals aimed at improving the situation;
• strictly approach stop-losses and take-profits.

Instead of output

Almost all work with the Forex market is based on the news (of course, if this is not a game of chance). It is difficult to say who exactly earns the most - in the smoking room there are figures of 500-1000% per year.

If we turn to macroeconomics, the most successful investor who played against the dollar was John Paulson, head of the Paulson & Co fund. In 2007, he earned $3.2 billion from the collapse of the US mortgage system. USA.

If you find an error, please highlight a piece of text and click Ctrl+Enter! Thank you so much for your help, it is very important for us and our readers!

The news trading technique is a fairly simple, even primitive method of trading. The main advantage of Forex news trading is that you can take a “quick” profit with little risk. The main disadvantage is that Forex brokers will not let you calmly trade on the news and will try in every possible way to put "spokes in the wheels". But first things first.

News trading

Most of the news does not affect the movement of exchange rates. For example, the news that Dmitry Anatolyevich received a new iPhone as a gift is indifferent to the markets.

Markets are interested in those news that directly or indirectly affect the macroeconomic situation in the country (world).

Read the article.
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sudden news

Important news for Forex trading are sudden and planned. “Sudden” news is, as a rule, difficult to predict and little expected events. For example, in February and March 2013, the euro declined significantly and smoothly against the dollar. Traders were at a loss - why is this happening? There was no serious news background ... Only by the end of May it became known about significant problems with Cypriot banks. Knowledgeable people(insiders) were selling the euro before the news about the troubled banks was known to the general public.

!!! Important recommendation!!!
Don't try to trade "sudden" news, ignore it!

Scheduled news

Scheduled Forex News– is a completely different matter.

There is a schedule for the release of economic news. On certain numbers, at certain times, macroeconomic data is released.
For example:
— inflation data
- unemployment
- at interest rates
— by GDP and industrial growth

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find out
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The most significant news are listed above.
We cannot predict whether the news will be positive or negative.
We also cannot predict the market reaction to the news. For example, it often happens that the market reacts to "good" data with a decrease, and to bad data - with an increase.

Important advice!!!
Never open trades before the release of important Forex news.
A trader trading on the news should not predict anything, he should “go with the flow”, that is, follow the price.

Read also my personal story - how I became a trader!
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Step-by-step algorithm for making money on the news

Let's look at a step-by-step algorithm for making money on the news.
1) Determine the release time of important Forex news.
To do this, you can use the calendar of economic news:

http://www.alpari.ru/ru/analytics/calendar/

You can use any other calendar - there are a great many of them.
Usually the Central European time of news release is indicated.

2) Select the desired currency pair for trading.
Everything is simple here, if the news, for example, is related to the UK economy, then we will trade the British pound against the US dollar (GBP/USD). If the news is related to the Canadian economy, then you need to trade the Canadian dollar against the US dollar (USD/CAD), etc.

3) 15 minutes before the news release, we need to place buy stop orders 15 points above the current price. And a sell stop order is 15 pips below the current price.
4) Stop loss of both orders 10-15 points.

Read about.
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Example

The current price (15 minutes before the news release) is about 1.3100. We as traders trading news, should have placed a buy stop order at 1.3115 with a stop loss at 1.3105. And a sell stop order at 1.3085 and a stop order at 1.3095.

The essence of these simple actions is as follows ...
We need a situation where the news comes out much better or much worse than expected.
For example, in the news calendar, the news is: "Industrial production data of such and such a country." Consensus forecast +1%.
News comes out - it turns out that industrial production has not grown, but fell by 0.5%.

Due to the fact that the actual data differed greatly from the forecast, a sharp price movement may follow. That's what we need! The price for a couple of minutes (or hours) can go hundreds of points. For example, from 1.3100 to 1.3000 (a drop of 100 points).
Look at the chart.

The price gradually decreased after the release of the news for an hour (1 candlestick on the chart = 1 five-minute period).

Such powerful movements don't happen often. Most often, traders trading news will lose, and lose 10-15 points on each transaction. But one strong price movement will more than cover 5-6 small losses and allow us to earn (read the article about earning on Forex).

Unfortunately, not everything is so cloudless and simple. Brokers really don't like news traders. We will not consider the reasons for “dislike”, since this is a topic for a separate article.

Forex brokers' methods of dealing with traders trading on the news

Let's take a quick look at how Forex brokers deal with news traders:
1) Disabling the trading terminal
2) Spread expansion
3) slippage
The first method is the most "ancient" and primitive - you (or all traders, companies) are "stupidly" disconnected from the server, therefore, there is no possibility to make transactions. Subsequently, stories about “technical problems, problems with the provider”, etc. will be told. etc. Brokers will never admit that the connection was cut off because of important news.

At the time of news release, the spread is often widened. This means that short-term trades will come at a high cost to Forex news traders.
For example, under normal conditions, the spread fluctuates around 2 pips. During the release of the news, the spread can be widened up to 5 points (almost 2.5 times).

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It will be useful for you to know.
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Slippage is the opening of a transaction at a price worse than the one indicated by the trader.
In our example, we placed a sell order (“sell stop”) at a price of 1.3085. Due to the sharp price movement, it can be executed at a price of, say, 1.3080. In this case, we automatically increase the size of the stop loss (in the example by 5 points) and by the same 5p. the size of the potential profit decreases.

Nevertheless, Forex trading on the news is a very interesting and exciting activity (adrenaline boosts). I recommend using this style as an addition to other trading methods.

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You may be interested in the article "Forex".

Good luck and happy trading. Arthur.
website

Video to reinforce reading.

You know, if I was always listened to, I would forbid beginners from trading on the news at all. They bring nothing to the newcomers except empty pockets and a headache. It is important to immediately take off the rose-colored glasses in order to understand what you are getting into.

Remember, the news is not for beginners. Don't say you weren't warned.

Why news is not for dummies

Predicting the price movement, which is pushed around by strong economic or political news, is sometimes prohibitively difficult. High-frequency robots frolic here, trying to grab their jackpot in seconds. But the common man has a hard time.

And why? Because the price on strong news often shows completely chaotic behavior. The price rushes up and down, showing wild shadows and long candles that fly wherever they please.

Problems from the technical side. Brokers:

• widen the spread (in Forex);
• transactions often do not go through;
• constant slippage (you enter at one price, and the deal is opened at another);
• terminals hang and tupyat.

Then the newcomers who got into the news yell at all forums that “they were not allowed to trade” and demonstrate their intellectual potential in every possible way. You look at this freak show and think, jeklmn, at least you figured out that trading on the news is the most risky type of trading of all. Well, where are you climbing, where are you all taking?

Remember: news trading is extremely risky.

But newbies keep jumping like zombies on the news train, as if they smell like fresh brains there. Certainly, if there common sense from the news you can squeeze your profit. But you should always keep the risks of this process in mind.

What news to trade

We already figured out where to watch the news in the lesson. For this we need economic calendars.

Since only the most important news has a strong influence on the market, the rest can be completely ignored, because they are of less use. Of course, the key news of the world is data on the American economy, because the US dollar is the key reserve currency of the planet.

There are only 5 main news that always affect the market:

1. NFP - NonFarmPayroll (change in the number of people employed in the non-agricultural sector).
2. FOMC meetings.
3. trade balance data.
4. CPI - consumer price index (consumer price index).
5. Retail sales data.

We are also interested in (recall fundamental analysis):

• data on discount rates;
• any meetings of the Central Bank;
• inflation data;
• geopolitical news (wars and disasters);
• GDP data.

What currencies to trade on the news

Those that contain the dollar, since these are the most liquid currency pairs and the news affects them first. These are couples like:

1. EUR/USD;
2. GBP/USD;
3. USD/JPY;
4. USD/CHF;
5. USD/CAD;
6. AUD/USD.

Intrade has an interesting business model with a hedge of all trades on the platform, so they are interested in increasing turnover and have developed an interesting clicker that can be used by them and other brokers.

The principle is simple. The news for the click is selected, then you need to specify the area on the screen where the click will be made (and this will be the button Buy or Sell), after which the clicker starts up and does everything for you.

Of course, it is desirable to use this clicker on the same platform that developed it. Not all brokers encourage clickers, and if a trader works only with such clickers, this is clearly seen from the statistics and many brokers will write him down as toxic, after which he will not last long. So take this into account and check with your broker how he treats such transactions. Some allow scalping on the news like this, some do not.

Often, professional traders write such clickers themselves, but in a completely adult version - in the form of a robot for the trading platform, which automatically opens transactions with a connection to the news provider's feed. Simpler clickers are well suited for those who just want to test how it works in general.

streddle

This method is used in Forex, we will describe it briefly. Before the release of the news, two pending orders are tritely set in different directions, if the news flies in one of the directions, the order is activated and it's done. Often such “forks” are implemented by robots that parse economic calendars or are configured in another way.

There are enough problems here, I placed orders incorrectly - I was left with a nose, say, a long candle can easily activate 2 orders at once and drive you into a heavy loss. As a rule, straddle is traded by advisors and brokers, by the way, there are no complaints about this method.

There are also enough disadvantages: orders slip, stops are often activated before the price reaches them, spreads and other joys are greatly expanded. Accordingly, you need to be well versed in the news and understand which of them are better for straddle and which are less.

Post news trading

I myself use this method and recommend it to you. An example is shown in the screenshot above for the NFP output. An hour has passed - the market has calmed down - you draw a corridor in which the price is trampling and you always find a couple of tasty entries along the trend or even against it.

Also, the news has one curious effect, which we also observe with gaps. After a strong fall, the price seeks to make up for it, to compensate for this gap. This is how in the case of NFP, a significant drop down and its compensation.

In this case, compensation occurs after a strong market reaction. If the market has not reacted in any way, there is nothing to compensate.

Binary Options News: Caution

It is my deepest conviction that you should either not touch the news at all, or choose a post-news trading method. For he:

• the safest;
• devoid of many risks;
• better predicted.

Of course, no one will stop you from using autoclickers or manual entries right at the news release, but the risks will be higher.

Remember: the risk is not only in the news itself, but in the technological implementation. For example, many brokers slow down on the news, their websites and platforms hang, the price slips (because liquidity providers do not cope with their work during the rush demand) and much, much more.

Beginners continue to climb into the thick of the news, face risks and then scream on the forums that “the platform hung at the most inopportune moment” or “a crazy candle in all directions brought down all my plans.” Then foam at the mouth begins, “the broker deceived me” and other screams from a room with thick walls.

Yes, silly, welcome to the world of news trading. He is just that - dangerous, with a bunch of risks. This is a topic for the most intelligent and cautious, and not for gambling stumps. So either activate the brains (if any), or jump into one of the most unpredictable areas of trading - the news. In the latter case, be prepared that "music will play in your house - but you will not hear it" (c)

I recommend carefully, without opening deals, to follow the market reaction to the release of important news and learn how to draw conclusions from this. Otherwise, you have no chance of making a profit from the extremely difficult, albeit fun, news process.

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