Which News Releases Should I Trade?

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Trading news, economic reports and other releases are important influencing factors in the financial markets and, thus, also impact your trading. These events can often cause volatility and abrupt changes in momentum and trend direction. In this article, we show you how news impact the financial markets, what this means for your own trading and provide you with some trading tips around best way to day trade forex news events events.

Price behavior before an important news event usually follows very similar patterns. First, volatility and momentum are often flat and price enters a sideways range. This happens when traders and investors are unsure about the numbers behind upcoming report. Thus, no new positions are taken and price just moves sideways. Sometimes, you can see sudden volatility spikes — when trading activity is low, relatively small orders can have a big impact on price movements. If you are in a trade and an important event is coming up, there are usually a few options: Or, you can move your stop loss to protect your position — keep in mind that sometimes, stops may not work during high volatility times because there could be gaps in price movements.

Finally, you can take partial profits on your trade and secure some wins and then wait it out with the rest. This is wrong and traders who follow such an approach will often experience losses without really understanding why.

Thus, such numbers are often already priced in going into a news release. Now that you have a better understanding of how to position yourself before news and how to interpret news releases, we can take a look at tips on how to trade the actual releases.

For that, there are only two advices you need to be aware of:. Not all news events are trade worthy and will offer good opportunities. The best best way to day trade forex news events opportunities during news events exist when you can see a tight consolidation before the event.

The narrower the range before the release, best way to day trade forex news events more traders are watching the release and the better usually the follow through. However, there is a catch as we will see.

When you see a narrow range before the event, you can usually expect to see sudden spikes into opposite directions during the release. Those volatility spikes have the goal to take out traders who have entered too early and with stops that are too tight. Also, when you see that the expected, the previous and the actual numbers are not pointing in the same direction, it usually takes traders and investors some time to figure out what that actually means and trading can be very wild.

Thus, always wait for the initial move to reverse and then see if price takes off into a new direction. This way, you will sometimes miss news trades that just take off, but you will also stay away from lots of wrong signals and be left with more best way to day trade forex news events trades. The most important news events that affect futures and forex traders: Interest rate announcements 2.

Consumer price index proxy for inflation 4. Business sentiment surveys 7. Consumer confidence surveys 8. There is a substantial risk of loss in futures and trading. Past Performance is not indicative of future results. Optimus Futures is a leading online futures broker that caters to traders seeking fast execution and best way to day trade forex news events data feeds combined with aggressive margins and deep discount commissions. About Optimus Futures Optimus Futures is a leading online futures broker that caters to traders seeking fast execution and stable data feeds combined with aggressive margins and deep discount commissions.

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