Trading News With Forex On Nadex


#1

by Darrell Martin

News happens all the time, all over the world and traders watch it for various reasons. News reports such as the Weekly Oil Inventory report, Earnings Releases from diverse countries, Manufacturing Sales reports and Unemployment Claims all trigger different reactions in the market. Just having a key Government Official speak can cause market movement.

As a trader, if you pay attention to the upcoming news and the way the market has reacted in the past, you can have a good idea how to trade each news release. Most of the news releases precipitate movement in the foreign exchange market, aka forex, FX or currency market.

With currency markets open and news happening around the clock, there’s bound to be a news release you can trade using forex. For example, coming up this week, Germany is releasing news concerning its GDP at 2:00 AM ET Tuesday that may affect the euro. Australia is releasing its Employment Change and Unemployment Rate reports at 7:30 PM ET Wednesday, which will probably affect the AUD/USD.

Many times, when someone is speaking from the FOMC, action in the market is expected. Sometimes the reaction is violent, moving the currency pairs hundreds of pips in a very short amount of time. Many US reports will see movement happen on EUR/USD.

Canadian reports show activity on the USD/CAD. News happening in Japan will show up on any of the four JPY pairs: AUD/JPY, USD/JPY, GBP/JPY and EUR/JPY.

If you want to trade the news using binaries, choosing a strategy that works with the upcoming news event is critical. It may be a strangle, butterfly or directional. Select the strike price(s) from the many offered, knowing the risk before placing your trade. Allow enough time for the market to react to the news in order for your trade to have the most opportunity to be profitable. You can always exit early when you have reached your profit goal or potential.

Nearly the same plan of action can be performed if using spreads. Determine which strategy is going to work best for the upcoming news event and choose the spreads that will allow the correct amount of movement for your trade to be profitable. Again, using Nadex, the risk is known before the trade is placed. The strategies may be iron condors, straddles or some other strategy.

Trading the forex pairs on Nadex offers many opportunities. Trading is available from Sunday evening through Friday afternoon, 23 hours a day. This makes trading the news using forex a possibility for most traders.

Remember, news trades are usually relatively quick trades of a couple of hours or less. Sometimes, they can be overnight trades that you “set and forget” by placing the trade before you go to bed. The news report comes out while you sleep and you awake to see how your trade turned out. Some of the strategies are low risk, you don’t lose sleep over what is happening and hopefully, you wake up with a profitable trade!


#2

I have a economic news question. Will the USD go up or down in value if a Fed interest rate hike is approved? I was expecting the USD/JPY to go up in value. While the EUR/USD will go down in value.