Now we enter the formal part and see what the actual strategy of the news trading. The exchange rate changes based on many factors, especially the forex market views of the participants based on the relevant data. The forex market views themselves are also influenced by many factors. Of course, the most important thing is the fundamental data released by the country.
The forex traded on the forex market and the economies they represent are like the stocks traded on the stock market and the companies they represent. If a company announces good news, such as an increase in earnings for the last quarter, the stock market will react immediately.
Conversely, when the company chooses bad news, such as a sharp decline in earnings per share year-on-year for the last quarter, the stock market will also react immediately and often fall. The forex market also has a similar phenomenon, that is, the exchange rate will be affected by the fundamental data released by the country.
Using our news trading method to profit, you don’t have to know what the fundamental data released is, or even worry about the results of the data. All you need to do is to know the exact time of the data release, and how to use the method we give to trade and profit.
Our trading method is to take reasonable actions at the exact time, and then let the forex market decide. Whether the data result itself is good or bad, no matter how the exchange rate reacts to the data, you can get pips. Typically, the forex market will produce 50 pips of volatility for important news, and this space is enough for us to operate.
Many websites provide accurate and timely data release schedules, such as dailyfx, and almost all trading platforms also provide resources, you can search directly through the search engine.
In this trading strategy, the first step we have to do is to check the schedule to grasp the exact time of the fundamental data points to be released tomorrow and next week. Some days there is more data released, other days there is less data released.
Generally speaking, the more data released, the more trading opportunities you face. After all, the more data released, the greater the exchange rate changes. Of course, what we are talking about here is the premise that other factors are equal.
Here we need to pay attention to the time zone issue, such as you need to know what the data release time in the UK is. First, you need to know the local time of the data release, and then convert it to UK time.
A simple way is to click on your computer’s time settings, which provide the conversion of time zones, you can make good use of this feature. But many forex websites have already provided similar services, you just need to directly view the schedule.
On the data release schedule, you will see the country that will release the data, and the exact time and content. You don’t need to pay attention to its content, you just need to know which economy released the data and when.
Assuming that the United States will release some important fundamental data at 21:30, then you will know the specific time of the price eruption.
Let’s take a look at what happens in a fairly typical situation in the forex market. EURUSD on June 14, 2004, you can see that before 8:30 Eastern Time, the forex market moved very slowly, at 8:30 the exchange rate only fluctuated a few pips, and then at 8:31 the price rose rapidly by 25 pips in one minute, within 15 minutes, it rose by 65 pips. After that, the forex market fell into dullness again. If you traded this market with our system, you would have made 40 pips of profit.
This kind of opportunity happens frequently, and it usually goes further, and if you use some of the advanced strategies we provide here, sometimes you can catch hundreds of pips of the forex market.
Fundamental data can be released at any time of the day. Because you live in different time zones, there are always data suitable for you to trade. Pay attention to the fundamental data that are convenient for you to trade.
If you live in North America, then first pay attention to the data release of the US dollar and Canadian dollar, and then you can pay attention to the data release of the euro and pound. But for customers living in Asia and Europe, you may need to pay attention to more economic data, because almost all the data released from the Japanese morning forex market to the US morning forex market can be paid attention to.
Sometimes some important unexpected events may cause large fluctuations in the exchange rate, but don’t try to catch this kind of event-driven forex market, because the occurrence of events is usually unpredictable, and it is also difficult to profit from it, because when we know these things, we have missed the trading opportunity.
