| In this article, I will discuss three ways how you can | | | | 4. Finally, watch the news release using your fast |
| take advantage trading forex during economic news | | | | datafeed and trade the numbers. 2) Straddle the |
| releases. | | | | News strategy This strategy is very simple and |
| Trading the economic numbers | | | | consists of 2 limit orders, one to buy a few pips |
| Straddle setup before the news | | | | above the range high and one to sell a few pips |
| Hedge setup before the news | | | | below the range low, then wait for the price to |
| 1) Trading the economic numbers strategy | | | | breakout triggering one of your orders. Your stop |
| Currency traders try to take advantage of the | | | | loss order should be placed a few pips below the |
| discrepancy between the forecasted and the actual | | | | range low when buying, conversely, a stop loss order |
| economic number, you need a very fast news data | | | | should be placed a few pips above the range high |
| feed such as Reuters or Bloomberg because you | | | | when selling. |
| want to get in the trade before the move begins. | | | | 3) Hedging the News strategy |
| Steps to trade the economic data numbers: | | | | What is hedging? Hedging enables a currency trader |
| 1. Purchase a fast news datafeed at Reuters or | | | | to simultaneously hold Buy and Sell positions in the |
| Bloomberg | | | | same currency pair at the same time in one trading |
| 2. Track the news consensus and determine the | | | | account. |
| significance of the economic news report being | | | | 1. To hedge, go both long and short at market price |
| released, if it is not important, do not trade it. | | | | 30 min before the news release. |
| You will be able to find all important data on a good | | | | 2. Add a protective stop loss order to both long and |
| economic data calendar | | | | short positions 30 seconds before the news release. |
| 3. For each important news release you need to | | | | 3. Add a limit order to both long and short positions |
| know how large a discrepancy has to be in order for | | | | 30 seconds before the news release. |
| you to act on the trade. | | | | |