Online Forex Trading | Forex Trading on the Breaking News

Zero Spreads Forex Trading

Forex Trading on the Breaking News

There are countless Forex trading strategies. Some work better than others. Recently I offered three fairly easy to follow strategies that can be used. In this article, I will discuss another strategy in somewhat greater detail.

This strategy has to do with trends. As I mentioned previously, professional forex traders will tell you “the trend is your friend.” It is, “until it ends,” as professional traders will also tell you. Here’s a forex trading strategy that follows the trend for a very, very short time, and has you exit the trade before the trend ends. For this trading strategy, you can typically expect to make 40 pips per trade while risking no more than 10 pips – that’s a 4 to 1 risk vs. reward opportunity. With this strategy, you can be wrong three out of five times and still make money.

The forex markets tend to have significant price movement immediately after relevant news stories have been released. These news stories give the latest results for a variety of economic metrics, including the PPI, the CPI, unemployment figures, etc. These results are reported on a fixed, regular schedule, so you can know when the news comes out. There are economic metrics released every week.

So how can you profit from this information? As I mentioned earlier, the forex market tends to move significantly as a result of these news stories. As an immediate result of any of these news stories, the forex may move 30, 40, or even 50 pips instantly. Of course this movement could be either up or down, so how do you know whether to go long or short on a particular currency? Again, the trend is your friend. Immediately after the news comes out (immediately, as in a few seconds afterwards) gauge which direction the currency has moved. If it has gone up more than 5 pips, go long that currency. Then immediately set a very tight stop-loss of 10 pips below the current price. Once the currency has moved in your direction 30, 40 or 50 pips, close out your position. If on the other hand, the currency has gone down more than 5 pips, short that currency. You will have gotten a nice return for just a few minutes of work with a controlled risk. Find an online forex trading broker and start making money today.

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