Trading the News

When you have a directional bias, you are expecting price to move a certain direction, and you’ve got your orders in already. It is always good to understand the underlying reasons why the market moves in a certain direction when news is released. When you have a non-directional bias, you don’t care which way price heads. You just want to get triggered. Setups for the non-directional bias are also called straddle trades But in all seriousness, as we learned in the previous section, news is a very important part to the forex market because it has the potential to make it move! When news comes out, especially important news that everyone is watching, you can almost expect to see some major movement. Your goal as a forex trader is to get on the right side of the move, but the fact that you know the market will most likely move somewhere makes it an opportunity definitely worth looking at. Big market moves made by news events often don’t move in one direction. Often times the market may start off flying in one direction, only to be whipsawed back in the other direction. Trying to find the right direction can sometimes be a headache! Profitable as it may be, trading the news isn’t as easy as beating Pipcrawler at Call of Duty. It will take tons of practice, practice and you guessed it… more practice! Most importantly, you must ALWAYS have a plan in place. In the following lessons, we’ll give you some tips on how to trade news reports.