The Basis of News Trading in Forex

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News trading is mainly based on data and some important economic events, which can help us get dozens of pips in half an hour. If we can combine a good risk control strategy, our returns will be very considerable. This also saves us the trouble of sitting in front of the computer all day. As long as you spend 10 minutes to half an hour a day following the news trading method, you will gradually have a good harvest.

News trading is more complicated than scalping, because news itself is complex, and news trading requires higher accuracy and stricter trading strategy than scalping, How to apply the news trading strategy in practice, news trading also takes a lot of time to explain.

No matter whether you are a beginner or an experienced veteran in forex trading, it doesn’t matter. This trading system is very easy to master, and even if you don’t understand the operation of the forex market, you can still get profits from this strategy. To cater to the different stages of traders, we will explain some specialized terms. If you are a non-news trader with a stable profit level, then our system can be used by you, and you can integrate it into your system. You can also continue your previous way of operation, but use the ideas provided by this system for signal filtering and multiple verification.

Many years of forex trading career made several of us traders aware of some meaningful phenomena, which we think everyone should pay attention to. This situation happens almost every day, and not only once a day. The market will move slowly for some time, during which the market either consolidates sideways or fluctuates slightly, and then the exchange rate suddenly jumps and moves sharply. The subsequent movement often brings dozens of pips of amplitude. This usually happens within a few minutes, but the trend it triggers can last for more than an hour or even longer.

This movement is usually caused by data release. Experienced traders in the market are used to it.

With the accumulation of experience, we have formed this specialized trading system that we propose here. Maybe some of you have already come up with this system, but we haven’t seen anyone publicly propose it. Maybe they want to keep it secret, anyway, we haven’t seen any material on this, but these are not important.

The important thing is that this forex trading system can indeed provide you with a lot of generous profits. But don’t spread this system widely. Sorting is our hobby, which is to find the loopholes in the trading strategy and expand the trading ideas.

Simply put, you will find that the fundamental data release is regular, and one minute before these data release, you can set up two orders, one above the market price to go long, and one below the market price to go short. Usually, the market will move 30-60 pips after the data release, but there are also many times when it exceeds 100 pips. Note that we are talking about an ideal situation here, and we have not considered your platform and complex market fluctuations. But in the later content, we will consider all these factors.

If you don’t want to sit in front of the computer screen all the time and can accept a smaller take profit pips, then you may accept the method we provide to you: just spend about 15 minutes, you can get 20 pips of profit per trade. If you have the leisure to sit in front of the computer screen, then you can use this strategy to capture bigger opportunities.

The biggest advantage of this trading method is that you only need to set a 10-pipe stop loss, and you have a very high win rate. This is exciting compared to the usual 20-60 pips stop loss. After all, you take very little risk. Trades with a high winning rate often bring huge profits.

If you use a 20 pips stop loss in your trading using this strategy, then your take profit setting will be 40 pips. If you have the patience to sit in front of the computer, you can easily get 60-150 pips, which gives you a reward-to-risk ratio of up to 4:1 to 15:1.

Although we have already given a detailed introduction to forex trading, we still need to remind you of some related aspects here. First of all, you must remember the position management issue we mentioned before. In all your trades, you must strictly follow these rules. Specifically, we recommend that the risk you take in any single trade should not exceed 2% of your account balance, which means that the loss per trade should not exceed 2% of your account balance.

Of course, if you trade a mini account, this ratio can be appropriately relaxed to 5%. For example, if you have $300 in your account, then 2% is equal to $6, which is a loss of 6 pips per trade. Realistically speaking, you will need to take more than 6 pips of loss when using this system to trade.

Your risk per trade will be higher than that of professional traders, which is normal for you to trade with a small account. Once your account grows to more than $600, you can lower your loss ratio to 2%. Don’t be too greedy, you can get profits with small losses. Don’t trade with risks you can’t afford.

In other words, your trading should be within your affordability. Before we explain this trading system in detail, there are a few things that need to be clarified. Specifically, the following three:

  • You must have a real trading account.
  • You also need to open a demo account.
  • Chart service.

I suggest you open an account on the MT4/MT5 platform, because the MT4/MT5 platform has powerful analysis functions, and these platforms provide demo accounts and chart services, but MT4’s chart service is the best among the free chart services. Therefore, you don’t have to get paid chart analysis tools, this free tool is enough for you to use.

Of course, many brokers trade based on MT4. Due to the decentralized distribution of the forex market, there are slight differences in the exchange rates of different brokers, which is allowed. But our news trading method has higher requirements for the stability and accuracy of the platform, so you must choose a high-efficiency and trustworthy platform before doing news trading.

Avoid brokers whose liquidity is too poor to cause difficulties in trading news, and avoid brokers with low integrity who cheat on the platform when there are large fluctuations in news. Before you trade with a real account, you need to operate on a demo account for at least 21 trading days, and you must successfully operate at least 10 times.

Register a free demo account on the platform of your choice, and of course, the demo account you choose must be from the same broker as your real account and be opened on the same trading platform. You need to know that the trading efficiency of the demo account is higher than that of the real account, so you should discount the trading smoothness of the demo account and then evaluate the trading smoothness of the real account.

You also need to pay attention to the fact that the demo account you open must be the same type of account as the real account. If you plan to open a mini account as a real account, then the demo account must be a mini account. If you plan to open a standard account as a real account, then the demo account must be a standard account. The number of lots you open should be consistent or close.

In the demo account, you can practice our news trading strategy well, but there are two points you need to pay attention to:

First, the demo account can not fully exercise your psychological ability, it is difficult to measure your trading psychology, and it is also difficult to train your trading psychology.

Second, the demo account is easier to trade and smoother than the real account when the forex market conditions change drastically. Of course, this also depends on the broker’s qualifications. Make sure you practice with a demo account first and psychologically try to mimic the real trading state. Here you need to focus on the steps of entering and exiting the forex market.

Generally, it takes 21 days to form a habit, so it makes sense for us to ask you to practice for more than 21 days. In addition, if you have not had time to familiarize yourself with the trading platform, candlestick Patterns and charts, now is the time to learn and use the platform and charts.

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