Best News Trading Data Releases. Special News Events

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Allison Murphy
6 years ago
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1 News Trading

2 Best News Trading Data Releases Interest Rate Change Core Retail Sales Core CPI Trade Balance Reports Existing Home Sales New Home Sales Manufacturing PMI Employment Changes Special News Events

3 Steps Involved in Trading a News Event Step 1: Identify a News Event and Forecast Number Step 2: Find the Necessary Deviation from the Forecast to Ensure Price Follow-Through Step 3: Choose a Pair to Trade Step 4: Layout Trading Plan Step 5: Execute Trading Plan

4 Step 1: Identify a News Event and Forecast Number Use ForexFactory.com to identify upcoming data releases and find the forecast value: The Forecast Value on this particular data release is 175k

5 Step 2: Find the Necessary Deviation from the Forecast to Ensure Price Follow Through News trading is about whether the price deviates from the forecast value, not the prior value. The forecast value is determined by various data analysts and a consensus of the expected value is formed and reported. That value is already priced into the market before the actual data release occurs. A deviation of the released data from the forecast data is the surprise that causes the market to move. We ve determined the amount of deviation that s been historically required to move the market enough that our strategy is statistically sound. The deviation values can be found in the appendix of this document.

6 Step 2: Find the Necessary Deviation from the Forecast to Ensure Price Follow Through

7 Step 3: Choose a Pair to Trade This would be the easiest part. Just choose a pair with good liquidity (lots of movement) that includes the currency affected by the data release. In the case of a US data release, I typically choose USD/JPY because it has good liquidity and moves in a logical manner. In other words, positive news should cause USD strength. USD strength translates to a buy on the USD/JPY. I would typically chooses CAD/JPY for Canadian Dollar trades and so on.

8 Step 4: Layout Trading Plan Laying out a trading plan sounds complex, but it s actually fairly straightforward. Just write it out. The plan using the example information should look like this: Trading the Non Farm Employment Change data release using USD/JPY looking for 248k or higher to buy or 108k or lower to sell. If those numbers are not reached, there is no trade. If those numbers are reached and the price spikes in the correct direction, I will wait for the initial price spike to retrace at least 20%. I will then enter in the direction of the spike with my stop loss below the spike.

9 Step 5: Execute Trading Plan If this is your first time trading the news, please use a demo account.the trade can unfold quickly and if you haven t practiced handling your trading platform you could seriously damage your trading account with a simple error.

10 Step 5: Execute Trading Plan Trade Rules: When the data is released determine if the trigger deviation was met. If not, stand aside. Look for price to jump in the anticipated direction. If it goes in the correct direction, wait for a retracement. Be sure the spread has dropped to somewhere near normal. When the retracement occurs, enter in the predetermined direction. Target a support/resistance level above the spike. Set your stop behind the beginning of the spike. Move your stop to breakeven + 1 pip when price reaches the end of the spike.

11 Retracement Price Action For the purposes of this example, we ll assume the deviation amount was met and the news was negative.

12 Trade Management Rules Risk 2% to 5% on the Trade Put stop loss initially 5 pips past the beginning of the news spike Take half of the trade off when price gets to the end of the spike Set the other half to break even and let it run

13 Important Notes Practice this on demo I can t stress this enough. My music teacher told me Don t practice until you get it right. Practice until you can t get it wrong. I took that to heart. The deviation numbers were calculated using past news events and the corresponding resultant price movements. You can use forexfactory.com to get information on prior data release and compare them to chart data.

14 US News Releases News Event Deviation Trigger Expected Movement Core CPI m/m 0.20% 50 pips Core Retail Sales m/m 0.50% 50 pips Interest Rate 0.25% 70 pips Non-Farm Payroll (NFP) 70K 70 pips ADP NFP 50K 40 pips ISM Manufacturing PMI pips

15 US News Releases (cont d) News Event Deviation Trigger Expected Movement ISM Non-Mfg PMI pips New Home Sales 70K 50 pips Existing Home Sales 400K 50 pips GDP q/q 0.30% 70 pips

16 Canada News Releases News Event Deviation Trigger Expected Movement Core CPI m/m 0.30% 50 pips Interest Rate 0.25% 70 pips GDP m/m 0.30% 50 pips Core Retail Sales m/m 0.50% 50 pips Employment Change 30K 60 pips

17 UK News Releases News Event Deviation Trigger Expected Movement CPI y/y 0.30% 50 pips Interest Rate 0.25% 70 pips Manufacturing PMI pips Services PMI pips Retail Sales 0.50% 60 pips GDP q/q 0.30% 50 pips

18 Australia News Releases News Event Deviation Trigger Expected Movement CPI q/q 0.30% 50 pips Interest Rate 0.25% 70 pips Retail Sales 0.50% 60 pips GDP q/q 0.30% 40 pips

19 New Zealand News Releases News Event Deviation Trigger Expected Movement CPI q/q 0.30% 50 Interest Rate 0.25% 70 Retail Sales 0.50% 60 GDP q/q 0.30% 40

Easy News Trader. Profit From Forex New Announcements By Dean Saunders

Easy News Trader. Profit From Forex New Announcements By Dean Saunders Easy News Trader Profit From Forex New Announcements By Dean Saunders The News Trader and every word, sentence, and paragraph contained within are copyrighted under he UK Copyright Service and protected