Riding the Bull or Bear news strategy ~ forex market hours new year
Anticipating Results (Most Aggressive Strategy)
The trader has an intuitive feeling (a hunch) for the outcome of the economic data. It is not a wise strategy to put on a trade before an economic news announcement. But if the trader has an informed point of view, putting on thetrade before the news announcement is an aggressive play that can be very profitable if correct. The key risk of being wrong and having the price move against you is important to minimize.
Tactics for the aggressive strategy are as follows: About 15 minutes before the economic data release, locatethe5-minute or 15-minutec hart.Locate support and resistance levels. Use the average true range (ATR) at the default setting of 14 periods. Place a market order in the direction you desire. Place a stop loss order at 2 times the ATR. Should you put on a limit order? In trading the news, the idea is to be ready for a big move But we don’t know if a big move will come. So a small limit order targeting 10 to 15 pips would be like eating cake with artificial sweeteners. If you’re going to trade the news, focus on controlling the risk. The idea is to take a ride on the bull or bear, get on before the break of the news, and then try to stay on to get the most out of the move. So I don’t recommend a small limit. You might want to put on a larger limit of 75 pips.
Getting off the trade in a news event requires a high level of skills in identifying shifts in sentiment. Renko charts are a powerful tool for this. Remember, riding a bull or bear represents high risk. But if you want to try it out, do it with small lots on and test your skills.
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