Here’s A Consistently Profitable Forex News Trading System!
So far we have discussed many Forex trading strategies that allow us to analyze the price action from many different angles. While the markets react violently and unpredictably in the short term, the mechanisms set up by low interest rates, and full employment (or conversely, high unemployment) have consequences that are relevant to many sectors of the economy, and trading them on a long term basis is certainly possible.
If you for one moment think a number of rational, professional money managers, traders or executing agents will use an erratic data release to do large transactions, you will seriously have to rethink even your most basic assumptions about the forex market.
There are a limited number of investment options when it comes to binary and those are the call” or the put.” The Wiki Trader software tells the trader to place a call the option is going to move upward by Signals of expiration while the put means the option will most likely be moving downward.
In its place of wasting his time on determining which of the signals delivered by the numerous systems at his removal is correct, the trader can study to upgrade his understanding of the markets and do his personal job for himself which will be extreme more satisfying than the random losses or gains registered by the use of these products.
If enough large players trading on such rumors do the same thing, then the market can see a counter-intuitive move where the EUR/USD exchange rate initially moves down in the expected manner, but then snaps back upwards as profit taking sets in — perhaps rising even further than where it started when the data was initially released.
News Trading is fundamentally an arbitrage opportunity, but like all arbitrage opportunities it will vanish very quickly if the market catches on. There is already evidence that this is happening and this evidence is clear from the reporting of the sudden change in fortunes of some of the gurus now selling this as a subscription opportunity.
Apart from the fact that I describe in my book, Bird Watching in Lion Country – Retail Forex Trading Explained (BWILC), the absolute necessity of real-time analysis and the folly of basing a trading strategy for the long-term on very short-term technical analysis indicators – or other illusionary patterns – I also explain a term which I coined: relational analysis”.
Posts of the Fx Market activity and expectations will be found here sometimes maybe just a plain vanilla discussion of Fx trading with ideas of what will need to happen before any higher probability set ups present themselves to be able to trade Forex with the best risk to reward ratio.
The logic behind this strategy of trading the NFP report is based on waiting for a small consolidation, the inside bar, after the initial volatility of the report has subsided and the market is choosing which direction it will go. By controlling risk with a moderate stop we are poised to make a potentially large profit from a huge move that almost always occurs each time the NFP is released.
Perhaps one of the most important tools of the FX news trader is a good forex news calendar for any currencies they intend to take positions in. Most online forex brokers compile and publish such a calendar, in addition to numerous independent forex related websites.
Now I look at the markets in a very different way to 95% of traders out there, and I can always see an opportunity in whatever the market throws at me. When you understand why the market moves as it does, you can profit from almost any trading scenario, and trading the news is probably one of the hardest things to make money from, if you do not understand what is happening to price.