Unlike stock markets, forex markets are open 24/5 except on the weekends. There is a continuous price action all day in the currency markets. Do you know this fact more than 90% of forex traders are speculators?
Currency markets react violently to the release of economic and socio political news. Currency rates can shoot up or down violently for a few minutes to a few hours before the market absorbs the impact of the news.
Fundamental news like NFP figures, the housing sales number, FOMC meeting etc all are released at a known time every month. You can Google fundamental news to find a lot of sites that provide this information.
You can get the day and time when a major economic announcement is going to be made. Non Form Payroll (NFP) figures have become very significant for USD pairs especially after the start of the recession recently.
Non Farm Payroll (NFP) figures are released at 8:30 AM EST on the first Friday of every month. Pairs like EUR/USD and others become very jittery just before the release of these figures. EUR/USD can shoot up sometime by 50-150 pips in 5-10 minutes.
Markets will mostly stabilize within a few hours after the release of fundamental news unless it is of such a fundamental nature to form a new trend in the market.
News release trading is ideal for those traders who like a lot of action within few minutes. Here is one strategy described below that you can use.
Suppose you are interested in trading EUR/USD. Enter both buy and sell orders at 10 pips above and below the price of EUR/USD just five minutes before the announcement of NFP figures.
Place stop loss of 10 pips for both the orders. Place take profit of 40 pips on both orders. When the NFP figures are announced, EUR/USD will either shoot up or down.
If it goes up by 10 pips, buy order will be triggered. Lets say, EUR/USD jumps by 60 pips. Your position will be automatically closed at 50 pips. You made 40 pips. Isnt it enough for a few minutes of work?
Suppose EUR/USD shoots down. Your sell order will be triggered and you will still make 40 pips. Sometimes the markets have a tendency to whipsaw so be careful. Practice this strategy on your demo account first ten times before going live.
Currency markets react violently to the release of economic and socio political news. Currency rates can shoot up or down violently for a few minutes to a few hours before the market absorbs the impact of the news.
Fundamental news like NFP figures, the housing sales number, FOMC meeting etc all are released at a known time every month. You can Google fundamental news to find a lot of sites that provide this information.
You can get the day and time when a major economic announcement is going to be made. Non Form Payroll (NFP) figures have become very significant for USD pairs especially after the start of the recession recently.
Non Farm Payroll (NFP) figures are released at 8:30 AM EST on the first Friday of every month. Pairs like EUR/USD and others become very jittery just before the release of these figures. EUR/USD can shoot up sometime by 50-150 pips in 5-10 minutes.
Markets will mostly stabilize within a few hours after the release of fundamental news unless it is of such a fundamental nature to form a new trend in the market.
News release trading is ideal for those traders who like a lot of action within few minutes. Here is one strategy described below that you can use.
Suppose you are interested in trading EUR/USD. Enter both buy and sell orders at 10 pips above and below the price of EUR/USD just five minutes before the announcement of NFP figures.
Place stop loss of 10 pips for both the orders. Place take profit of 40 pips on both orders. When the NFP figures are announced, EUR/USD will either shoot up or down.
If it goes up by 10 pips, buy order will be triggered. Lets say, EUR/USD jumps by 60 pips. Your position will be automatically closed at 50 pips. You made 40 pips. Isnt it enough for a few minutes of work?
Suppose EUR/USD shoots down. Your sell order will be triggered and you will still make 40 pips. Sometimes the markets have a tendency to whipsaw so be careful. Practice this strategy on your demo account first ten times before going live.
About the Author:
Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading; stocks and forex. Download Forex Scalping Cheat Sheets. Discover The Best Forex Signal Service! Read about Trend Forex System.
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