By: Adrian Friggier
This is something I was exposed to properly only very recently funnily enough, just a few days ago I received some information about news trading strategies. At this point I said to myself, a strategy for news trading? Hmm I never thought this would be profitable.
For some reason which I am also not so sure about I used to make sure to be out of the markets during important news releases in order to avoid being wiped out with the very fast market moves and spikes in all directions of the markets during the news release and in the minutes before and after the release.
On this topic I was just now back testing some news trading systems on my platform and can say that one can collect a few pips by introducing a news strategy with safety margins, if you understand and learn well the different news releases of course and the underlying movements of the news in respect of the pairs in caption.
Safely one can bank 10 to 50 pips very fast if you follow the market movement within a few minutes or even seconds sometimes. Since I trade mostly the cable I was watching news moves for the GBP and the USD of the recent days and months and have seen a nice regular pattern in the direction of the news being positive or negative to the expected value.
What is interesting is that the pairs react in a few minutes or even seconds from the news release, in various main news items you can have both an upward and downward move of 75 to 100 pips only to come back as the nes release is finished. Than after the news release is settled the market sentiment starts to take place and ride the pair to the news result.
Needless to tell you people, do not take this article as an advice but as a means to make you research more options to collect pips without exposing your account too much of course. I will write you more about this topic people and will keep you posted with any good strategy available.