in economic growth (positive economic releases) as they usually offer opportunities to jump on an uptrend. Remember that the markets reaction to a news release usually lasts from 30 min up to 2 hours. Unemployment Claims Bad, home Sales Good, now that weve established the importance of understanding the news and the affect it might have on the price, we have to learn how to use news releases to our advantage. Not only for news releases but for many other reasons as well. In this article I'm going to focus on one very successful strategy we have developed for trading spikes that you can go out and use right away. Next to a particular indicator you see three data columns: previous reading, forecast, and actual reading. And here is a reference account running the system. Volatility spikes during these periods and prices may move in a disorderly fashion. In contrast, economic reports showing a slack in economic growth result in the weakening of the countrys currency.
The chart below shows a good opportunity on USD/CAD on June 23 when retail sales and inflation CPI came out much better than expected. Its one of the most influential statistic indicators published by the Bureau of Labor Statistics. The bigger the divergence between the actual and the forecast number, the bigger is the impact on the market. So I bought during that jump and locked it at breakeven. After the FED Chairman Yellen failed to deliver on the Tapper on June 18, which is dollar negative, USD/CAD jumped 30 pips.09 only to reverse on a 150 pip fall. Trading on expectations: buy the rumor, sell the fact. Short Term News Trading, trading news intraday is a bit more difficult because of the volatility and tighter stops. Or from the MQL Market here. Buying after bad news, because of previous good data, causes a pair to form an uptrend. Previous readings are not as important as forecast ones. For more on how to trade currencies: Fair Value An Efficient Way for Trading Currencies. This could be disastrous for your bet.