One of the most popular methods is to trade forex news releases. This type of strategy is intriguing to many people because of the instant gratification. You lay on the trade minutes before the release, your heart pumps when the clock ticks within 60 seconds of the number coming out, and when it does, you feel either an instant sense of elation, the trading high, or an instant sense of frustration.
Forex news trading is great for traders who like a lot of action within a very short period of time. Trading forex news is based on the idea that when an economic number deviates significantly from the consensus forecast, there is usually a knee-jerk reaction accompanied by decent follow-through. However, there are many different ways to trade forex news releases, and if done incorrectly, it can lead to more losers than winners.
The first strategy is to place a trade before the number is released, the second is to take the trade only after the forex news release hits the wires, and the third is to do a combination of both. One of the biggest advantages of proactive trading is the risk-to-reward ratio, which is usually very good because the strategy entails entering into a position 15 to 20 minutes before the number is released.
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