I would like to share with you simple and powerful strategy (or method) for trading the news. I have initiated some discussions about this strategy during my chatting with some people in the IRCFOREX chatting room. As a result, many people suggested and encouraged me to write this strategy down and post in this forum for the traders reference and use. I am providing this method as a gift for all the traders to use it effectively and in pre-determined manners.

I have been using this strategy for the past two years and I found that it is actually a money-making method. In addition, using this method for trading the news in FOREX will require spending approximately less than one hour in front of the computer for per single trading news. This makes it a cost-effective system that shall work most of the time for FOREX traders. The release of news “Fundamental Announcement” usually causes a market movement. If you follow the steps as indicated below, your risk with this strategy system is minimal.

The following are the steps that you need to do if you want to be a successful and profitable FOREX trader for trading the news using this method.
• During each weekend (Saturday or Sunday) spend some time viewing economics calendar for the upcoming major news (Fundamental Announcements) that will be released by the next week. In the calendar, select and mark the major news with its time and currency pair as well. You may need to know what your time zone is in relation to GMT.

• Before 15 minutes of the news release, prepare and set up a one-minute candle type chart for the currency pair that will be impacted by the news release.

• For example, let’s say the US is scheduled to release some major news at 08:30 am EST. Just one minute before the news release time at 08:29 am, set up two limit orders, one order is long and another one is short as described below:
a. Set up a limit order (long) at 10 pips above the highest high price of the one-minute candle formed at 08:29. Set up this order with 15 pips as stop loss and 30 to 50 pips to take profit.
b. Set up a limit order (short) at 10 pips below the lowest low price of the one-minute candle formed at 08:29. Set up also this order with 15 pips as stop loss and 30 to 50 pips to take profit.

NOTE: Difference between market and limit orders
Limit orders are orders that a trade should be executed (in the future) when the market price reaches a specified price trigger. Market orders are orders that executed immediately at the current market price.

• At 08:30 am EST, when the news releases and depending on the news, the market can explode in either direction, north or south. The limit order (long) can be filled if price will go north and hit the target or the limit order (short) can be filled if price will go south and hit the target. Once one limit order is filled and executed then the second limit order needs to be cancelled. If the price does not react sufficiently after the first 3 to 5 minutes after the release of the news, cancel both long and short limit orders.

Should you have any question or require further clarification about this trading method, please let me know.

Best regards,

MACD

Thanks for the input.. I personally enjoy hedging trades. and yes it does help determine which direction to take when trading certain news events.

Good write up MACD!!

Ciao.

Linuzo wrote:
Linuzo,

Thanks for the support.

Best regards,

MACD

this is a good hedge strategy. I\'ve been interested in trading news for a while but I\'ve heard that the spreads and order fills go completely haywire during news releases. So orders don\'t get filled instantly, plus the spreads get stretched quite a bit. How has your experience been? Also, what broker(s) do you use for news trading?

DarezGhost wrote:
For accurate and reliable market tips and daily updates Finexo is the best. Many of my friends suggested me this when i was a newbie in Forex trading. Since then my dealer is providing me with the most accurate tips, market updates and charts so that i can make optimum use of these. It has fetched me 99% of returns on my investment.

Many other qualities like user friendly platform, easy forex glossary, well managed accounts, charts and economic calender have made Finexo unique.