If you are new to trading you may think trading around news time is the best. You see the big moves and think you can make a killing in Forex Trading, Binary Options or any other trading instrument. The hard facts are, it is nearly impossible to get a hold of the news release before the actual release moment.
This isn’t the world of Trading Places where the crop report allows people to make a lot of money since they knew what the report says ahead of time. Without going into much detail about this, the odds of having the information in front of you are 0%. This makes guessing the big moves nearly impossible to predict. You mustn’t get excited by this.
There is some good news however. Trading after the release can be profitable if you know what you are doing.
Let’s go through the news release process first. You are watching your charts on the first Friday of the month. The US economy is slated to have so many jobs. Once the release comes out at 8:30am, price on the futures and most US dollar currency pairs will spike in one direction. Most likely it will spike in the opposite direction as well. This is where the first breakout trade will occur. You want price to jump through the high of the first few trading candlesticks. Once this price has established, price becomes ripe for a trade.
This is where you start looking for another move into new highs or lows depending on the movement. Don’t get stuck with the false breakout. You want to see it clear the high or low pretty quick. Once this happens you can take your directional trade. It will vary every month, but the secondary move is very powerful. It usually holds above the current breaking point.
Another trade you can look for is a complete reversal. This doesn’t happen all the time, but when it does it can be very powerful. In this case you are looking for price to be strong in one direction for at least the first 10 minutes after news comes out. You then wait for price to come all the way down to the LOW of the news release candle. You can get all this information on a Metatrader chart.
If price breaks the low, price will push hard into the that direction. It usually moves the same amount of the original move and more. It is a clean setup and worth taking the breakout to the side you want. These trades don’t happen every month, but keep them in mind when NFP trades come. You don’t want to miss them if they show up.
Trading around news time can be profitable if you know what to do. Try not to force the trade entries. Let the good setups come to you.