facebook banner
logotype
Back to list

Trading on Price Action During News Releases

5:04 PM Nov 13, 2019
9746
Forex trading

Have you ever noticed how the market behaves during major news releases? It’s just a nuthouse. You cannot for sure predict the future direction of a price. And you can never tell whether it will change a trend during the next couple of seconds, or not. You will probably suffer severe losses without a well-functioning risk management system and especially without successful trading experience in a highly volatile market.

So, shouldn’t you trade during news releases at all? Of course not. There is a plan for every situation on the market. Today I will tell you what to do if you fail to trade on the news.

News Trading Styles

During a major news release, traders usually act in three different ways:

  1. Trading ahead of the news release. Here traders make an assumption about the outcome of the announcement and open trades in advance.
  2. Trading during news releases. It’s the most common style. Traders enter the market immediately after the announcement.
  3. Trading after the news release. These traders open their trades when the market already has a certain direction and you can open trades based on price actions. Today we’re gonna talk about this particular trading style.

So How You Do It?

When traders got used to making trading decisions solely on the basis of price actions then trading during news releases might seem too risky for them. Typically, these traders wait for the peak of volatility to end. Then they switch to a higher timeframe (4-hour, daily, or any other convenient for you), analyze the current market situation, and only then open a trade.

It happens that after the peak volatility decreases sharply. In this situation, traders using price actions have no choice but to retreat and do nothing. Please don’t take it as something negative. Yes, you did not manage to make money on this news, but you didn’t lose a dime, unlike thousands of other traders.

Main Benefit of This Method

What is the main cause of losses on Forex? It’s incorrect assumptions about future market behavior. When you trade exclusively on price actions, you don’t actually predict the future. Your trading decisions are based on previous and current market actions.

The simultaneous trading decisions of millions of traders have a huge impact on quotes. With this method, your trading decisions are already based on the actions of most traders. Thus, you’ll have much less unpleasant surprises to expect.

A Couple More Tips

Ultimately, you will definitely develop your own system. Maybe this method won’t work for you at all. But if you want to try focusing on price action trading, here are a couple of useful tips:

  • Get ready for the news release in advance. Check the economic calendar on the weekend for the week ahead and every morning for the current day.
  • Focus mostly on the news with high and medium impact. News with a lower impact is unlikely to affect the price at all. Some calendars can be sorted by the level of influence.
  • Some news releases start having a strong impact on the market, even a couple of days before the actual new release. If you are afraid to trade during high volatility, you should avoid trading 24-48 hours before major events such as Non-Farm Payrolls or Fed Rate Decisions.
  • The largest news releases usually come from the United States and mainly influence the major currency pairs (USD pairs). However, movements in the market after some news releases are so strong that they also have an impact on cross-currencies. Be careful.

Well, I think now you have everything you need to successfully survive the major news release and even make some profits on it. Remember one main rule: you should trade not on the news, but on the price action. Forget about data from the calendar. Better focus on the market itself. Then you will succeed.

Popular articles

Stay tuned for the latest FXCL stories

trading mindset beginners novice traders trading strategy losses forex mistakes trading habits trading plan forex trading women in Forex female traders risk management broker profit trading instruments pairs price advantages of forex leverage FXCL investments copy trading advantages of Forex social trading professional traders trading psychology demo trading buy/sell bid/ask spread Metatrader 4 market analysis technical analysis fundamental analysis trade trading platform Forex trading novice trading dealing with losses charts timeframe indicators MetaTrader 4 trading routine support level resistance level trend low-hanging fruit stop loss loss trading history long-term goals open trade close trade daily charts swing trading intraday trading scalping trading setup Forex traders bullish bearish resistance support MA 200 trend trading professional trading EMA EA daily chart weekly chart Forex news highs lows account type cent trading Mini Micro Cent Partnership commission fees trading terms Stop Loss news trading economical calendar major news release currency pair currency rate national currency trading journal trades profit/loss emotions news release positions size Expert Advisors platform trading robot cryptocurrency volatility day trading position size lot account types cent accounts Mini account ECN Copytrade ECN accounts swap-free minimum deposit order execution liquidity providers demo accounts real account low-risk trading EUR/USD economic calendar majors cross-currencies exotic currencies base currency quote currency quotes bid ask Brexit United Kingdom European Union GBP Euro GDP WTO price levels moving average 4-hour chart 1-hour chart bulls bears false breakout cross-currency USD price action pin bar trading inside bar trading hands off breakeven stop loss 50% stop loss pin bar high-frequency trading position trading swings breakout strategy trading style Entry order Take Profit hammer shooting star inside bar pinocchio bar head and shoulders harami risk to reward ratio trading calculator trader’s age emotion control stop-hunting false signal trading session New York session Asian session non-farm payrolls fed rates decision central banks mentor teacher Forex education Forex books candlesticks bonuses tradable bonus no deposit bonus deposit bonus cashback pending orders counter-trend trading risk-to-reward ratio 1-2% rule uptrend downtrend news releases slippage emotional trading stop orders limits orders trailing Stop correlation Correlation Matrix EURUSD EURJPY RSI Overbought/Oversold indicator doji morning start candlestick pattern liquidity London session gap requote US dollar greed excessive trading Expert Advisor trading instrument Twitter Trump euro Canadian dollar Japanese yen Mexican peso currency pairs Fed China economic news currency wars USA interest rates trade agreement H1 H4 D1 sell trade buy trade price level trading system COVID-19 coronavirus lockdown checklist Default mode network Nonfarm Payrolls intraday traders lot size Stop Out margin breakeven pip point entry price chart candles weekly candle daily candle engulfing candle Doji W1 fears money management trading signals Charles Dow Dow theory primary trend Relative Strength Index signals market noise trading volume oversold/overbought corrections candle M30 GBPUSD GBPJPY pending order fundamentals Interbank order Stop order Limit order Standard account Interbank account liquidity provider M5 chart gold XAUUSD Chinese yuan flat US Dollar Fed Interest Rates inflation level XPTUSD platinum XAGUSD silver USDCNY Chinese Yuan instruments swap trading hours Buy Stop Sell Stop Average True Range ATR range sideways range price level trading scripts Excel tables entry point equity balance applications highs and lows RSI Fibonacci terminal server proxy OS Windows XP self-trading Forex advantages gap trading Fibonacci levels USDJPY Buy Limit Cherry Blossom market cycle mark-up mark-down consolidation distribution long positions short positions double bottom triple bottom double top triple top pattern signal presidential cycle Elliott wave Kondratiev wave Forex terminology quote standard lot mini-lot micro-lot cross pairs exotic pairs counter-currency terminology Margin Call long position short position buy sell candlestick chart bar chart line chart range market channel high low ADX OHLC patterns profit level martingale aggressive EAs VPS demo account EA tester trading signal chasing the market clicking the button oil trading lot EUR cent account Forex mentor novice trader emotions control fear psychological level round numbers Key Levels indicator MetaQuotes iOS Android mobile trading mobile terminal VPS server financial portals day trader position closing short timeframe fast trading news site news portal FXStreet Investing.com Forex Factory ForexLive DailyFX CPI PPI economic indicators Non-Farm Payrolls monetary policy FOMC retail sales inflation rates program installation intuition apps ECN brokers market makers financial markets indices commodities stock metals trading robots Forex mentors confidence bias low-frequency trading set and forget end-of-day trading exit trade auto-trading OCO trailing stop auto-management competitive advantage partnership IB referral Introducing Broker Sub-IB EURGBP EURCHF Donald Trump Twitter exotics minors trading patterns wedges pennants triangles breakout trading range trading confident trading trading goals japanese candles stars morning star evening star Japanese candles inverted hammer hanging man abandoned baby spinning top spinning bottom inverted head and shoulders trading figure trading pattern beginner mistakes unrealized profit/loss Forex scammers money managers overtrading Trader’s Cabinet MT4 trading styles exit point Forex myths currency bitcoin ethereum tether litecoin tick chart education European session cross currency GBP/USD GBP/JPY M15 intraday strategy American session USD/CAD M5 Bollinger Bands MAM investing high water mark currency market stock market cryptocurrency market figures diamond divergent triangle symmetrical triangle reversal signal financial intelligence financial education long-term investing triangle ascending triangle descending triangle risk control stocks Forex mutual fund EUR/AUD AUD Australian Dollar Australia ECB RBA demo live live account spike bearish spike bullish spike breathing techniques meditation unusual trading tips useful habits nutrition intermittent fasting Three indians pamm mam expert advisors start-up capital business Forex business oversold overbought reverse signals 15-minute chart full-time trading discipline drawdown inflation devaluation IDR LAK export Russia regulations regulators Central Bank quantitative easing quantitative tightening Donald Trump Joe Biden coins indexes DXY ICO Mrs. Watanabe beginner trader carry trading young traders women traders productivity self-discipline rectangle sideways channel trend figure Alexander Elder John Murphy Jack Schwager limit order leaving Forex useful tips motivation on Forex expanding triangle 5 candlesticks signal confirmation loss control currencies Germany market execution instant execution taxes laws remote trading withdrawals time management British pound BoE unemployment rate interest rate breakout Sydney session Tokyo session disposition effect continuation pattern golden rule enter trade high volatility risk trading trading discipline trading strategies Forex risks trading risks systemic risks technical risks force majeure criminal risks self-education self-study professional education Forex forecasts partnership program Forex bonuses Forex contests self-employed trader bars harami cross engulfing belt hold sandwich piercing line dark cloud cover marubozu three black crows upside gap two crows multitasking wedge figure trading sessions major trend million financial literacy budget goal setting Forex resources Myfxbook useful tools account analysis account monitoring trading analysis economic sentiment consumer price losing streak perfectionism consistent profits starting capital initial investment market psychology japanese candlesticks PAMM trust management money manager holidays market sentiment CHF CAD Great Britain pound Swiss Frank reserve currency averaging morning routine initial capital potential profit reverse pattern rounded bottom rounded top saucer inverse saucer IB Program IB Commission Sharing reversal patterns deposits payment methods payment systems local transactions trader’s block market balance
trading mindset beginners novice traders trading strategy losses forex mistakes trading habits trading plan forex trading women in Forex female traders risk management broker profit trading instruments pairs price advantages of forex leverage FXCL investments copy trading advantages of Forex social trading professional traders trading psychology demo trading buy/sell bid/ask spread Metatrader 4 market analysis technical analysis fundamental analysis trade trading platform Forex trading novice trading dealing with losses charts timeframe indicators MetaTrader 4 trading routine support level resistance level trend low-hanging fruit stop loss loss trading history long-term goals open trade close trade daily charts swing trading intraday trading scalping trading setup Forex traders bullish bearish resistance support MA 200 trend trading professional trading EMA EA daily chart weekly chart Forex news highs lows account type cent trading Mini Micro Cent Partnership commission fees trading terms Stop Loss news trading economical calendar major news release currency pair currency rate national currency trading journal trades profit/loss emotions news release positions size Expert Advisors platform trading robot cryptocurrency volatility day trading position size lot account types cent accounts Mini account ECN Copytrade ECN accounts swap-free minimum deposit order execution liquidity providers demo accounts real account low-risk trading EUR/USD economic calendar majors cross-currencies exotic currencies base currency quote currency quotes bid ask Brexit United Kingdom European Union GBP Euro GDP WTO price levels moving average 4-hour chart 1-hour chart bulls bears false breakout cross-currency USD price action pin bar trading inside bar trading hands off breakeven stop loss 50% stop loss pin bar high-frequency trading position trading swings breakout strategy trading style Entry order Take Profit hammer shooting star inside bar pinocchio bar head and shoulders harami risk to reward ratio trading calculator trader’s age emotion control stop-hunting false signal trading session New York session Asian session non-farm payrolls fed rates decision central banks mentor teacher Forex education Forex books candlesticks bonuses tradable bonus no deposit bonus deposit bonus cashback pending orders counter-trend trading risk-to-reward ratio 1-2% rule uptrend downtrend news releases slippage emotional trading stop orders limits orders trailing Stop correlation Correlation Matrix EURUSD EURJPY RSI Overbought/Oversold indicator doji morning start candlestick pattern liquidity London session gap requote US dollar greed excessive trading Expert Advisor trading instrument Twitter Trump euro Canadian dollar Japanese yen Mexican peso currency pairs Fed China economic news currency wars USA interest rates trade agreement H1 H4 D1 sell trade buy trade price level trading system COVID-19 coronavirus lockdown checklist Default mode network Nonfarm Payrolls intraday traders lot size Stop Out margin breakeven pip point entry price chart candles weekly candle daily candle engulfing candle Doji W1 fears money management trading signals Charles Dow Dow theory primary trend Relative Strength Index signals market noise trading volume oversold/overbought corrections candle M30 GBPUSD GBPJPY pending order fundamentals Interbank order Stop order Limit order Standard account Interbank account liquidity provider M5 chart gold XAUUSD Chinese yuan flat US Dollar Fed Interest Rates inflation level XPTUSD platinum XAGUSD silver USDCNY Chinese Yuan instruments swap trading hours Buy Stop Sell Stop Average True Range ATR range sideways range price level trading scripts Excel tables entry point equity balance applications highs and lows RSI Fibonacci terminal server proxy OS Windows XP self-trading Forex advantages gap trading Fibonacci levels USDJPY Buy Limit Cherry Blossom market cycle mark-up mark-down consolidation distribution long positions short positions double bottom triple bottom double top triple top pattern signal presidential cycle Elliott wave Kondratiev wave Forex terminology quote standard lot mini-lot micro-lot cross pairs exotic pairs counter-currency terminology Margin Call long position short position buy sell candlestick chart bar chart line chart range market channel high low ADX OHLC patterns profit level martingale aggressive EAs VPS demo account EA tester trading signal chasing the market clicking the button oil trading lot EUR cent account Forex mentor novice trader emotions control fear psychological level round numbers Key Levels indicator MetaQuotes iOS Android mobile trading mobile terminal VPS server financial portals day trader position closing short timeframe fast trading news site news portal FXStreet Investing.com Forex Factory ForexLive DailyFX CPI PPI economic indicators Non-Farm Payrolls monetary policy FOMC retail sales inflation rates program installation intuition apps ECN brokers market makers financial markets indices commodities stock metals trading robots Forex mentors confidence bias low-frequency trading set and forget end-of-day trading exit trade auto-trading OCO trailing stop auto-management competitive advantage partnership IB referral Introducing Broker Sub-IB EURGBP EURCHF Donald Trump Twitter exotics minors trading patterns wedges pennants triangles breakout trading range trading confident trading trading goals japanese candles stars morning star evening star Japanese candles inverted hammer hanging man abandoned baby spinning top spinning bottom inverted head and shoulders trading figure trading pattern beginner mistakes unrealized profit/loss Forex scammers money managers overtrading Trader’s Cabinet MT4 trading styles exit point Forex myths currency bitcoin ethereum tether litecoin tick chart education European session cross currency GBP/USD GBP/JPY M15 intraday strategy American session USD/CAD M5 Bollinger Bands MAM investing high water mark currency market stock market cryptocurrency market figures diamond divergent triangle symmetrical triangle reversal signal financial intelligence financial education long-term investing triangle ascending triangle descending triangle risk control stocks Forex mutual fund EUR/AUD AUD Australian Dollar Australia ECB RBA demo live live account spike bearish spike bullish spike breathing techniques meditation unusual trading tips useful habits nutrition intermittent fasting Three indians pamm mam expert advisors start-up capital business Forex business oversold overbought reverse signals 15-minute chart full-time trading discipline drawdown inflation devaluation IDR LAK export Russia regulations regulators Central Bank quantitative easing quantitative tightening Donald Trump Joe Biden coins indexes DXY ICO Mrs. Watanabe beginner trader carry trading young traders women traders productivity self-discipline rectangle sideways channel trend figure Alexander Elder John Murphy Jack Schwager limit order leaving Forex useful tips motivation on Forex expanding triangle 5 candlesticks signal confirmation loss control currencies Germany market execution instant execution taxes laws remote trading withdrawals time management British pound BoE unemployment rate interest rate breakout Sydney session Tokyo session disposition effect continuation pattern golden rule enter trade high volatility risk trading trading discipline trading strategies Forex risks trading risks systemic risks technical risks force majeure criminal risks self-education self-study professional education Forex forecasts partnership program Forex bonuses Forex contests self-employed trader bars harami cross engulfing belt hold sandwich piercing line dark cloud cover marubozu three black crows upside gap two crows multitasking wedge figure trading sessions major trend million financial literacy budget goal setting Forex resources Myfxbook useful tools account analysis account monitoring trading analysis economic sentiment consumer price losing streak perfectionism consistent profits starting capital initial investment market psychology japanese candlesticks PAMM trust management money manager holidays market sentiment CHF CAD Great Britain pound Swiss Frank reserve currency averaging morning routine initial capital potential profit reverse pattern rounded bottom rounded top saucer inverse saucer IB Program IB Commission Sharing reversal patterns deposits payment methods payment systems local transactions trader’s block market balance