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Unlike stock markets, forex markets are open 24/5 except on the weekends. There is a continuous price action all day in the currency markets. Do you know this fact more than 90% of forex traders are speculators?
Forex markets have the tendency to react violently to the release of economic and socio political news. You cant predict when important sociopolitical event will be breaking news.
Fundamental news like NFP figures, the housing sales number, FOMC meeting etc all are released at a known time every month. You can Google fundamental news to find a lot of sites that provide this information.
One these websites, you will find the day and time when a major economic announcement is expected. Non Form Payroll (NFP) figures have recently become very important for USD.
NFP figures are released at 8:30 AM EST on the first Friday of each month. Currency pairs like EUR/USD become very violent just after the release of these figures. EUR/USD can shoot up sometime by 50-100 pips in 5-10 minutes.
Markets mostly stabilize within a few hours after the release of these figures unless these figures are of such a fundamental nature to form a new trend in the market.
Forex news trading is ideal for those traders who like a lot of action within few minutes. Here is one strategy that you can use.
Enter both buy and sell orders on for example EUR/USD at 10 pips above and below the price of EUR/USD just five minutes before the announcement of NFP figures.
Put stop loss of 10 pips for both the orders. Put take profit of 40 pips on both orders. When the NFP figures are announced, EUR/USD will usually react violently and either shoots up or down.
If it goes up by 10 pips, buy order will be triggered. Lets say, EUR/USD jumps by 60 pips. Your position will be automatically closed at 50 pips. You made 40 pips. Isnt it enough for a few minutes of work?
Suppose EUR/USD shoots down. Your sell order will be triggered and you will still make 40 pips. Sometimes the markets have a tendency to whipsaw so be careful. Practice this strategy on your demo account first ten times before going live.
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