Hi everyone, hope all of you are having a great trading day no matter what you are trading. I wanted to share my strategy for trading fundamental news with you guys. I use this whenever there is a major economic announcement scheduled for release. All you need to execute my strategy is a forex trading account, trading capital and a solid forex calendar. I recommend PaxForex as your trusted forex broker as they offer an overall excellent service to all type of forex traders. Their tight spreads are one key profit booster with my strategy, let me explain.
The tighter the spread is, the more pips you will earn. The wider the spread is, the more the forex broker will earn. With PaxForex you can some of the tightest spreads in the forex industry which means that you simply earn more pips per trade. Here is another way to look at it, if you trade at another broker who offers higher spreads and you have a good trading strategy which earns you solid pips every month, you will earn more pips per month using the same strategy at PaxForex due to the lower spreads.
Trust me, this may not sound like much on a trade-per-trade basis, but once you accumulate it and up the pips it makes a very big difference. Just keep in mind that a successful trading strategy is not measured by one good trade, but by plenty of trades over a long time period. Let’s just say that you get a 0.5 pip spread improvement at PaxForex and that your average trade size equals 1.0 lot. That is $5 per trade more that you can earn. I place roughly 50 trades per day which means that I earn $250 more re day or $5,000 more per month. As you can see, tight spreads make a big difference.
Next you need a solid economic calendar and PaxForex provides a very good one. A lot of different places focus on major events or major currency pairs only, but at PaxForex you can get a much wider picture which also creates a lot more trading opportunities for my fundamental trading strategy. You can access the calendar on the PaxForex website, even if you are not a traders there as it is free for everyone, by clicking on fx research drop-down in the top menu bar and then select the forex calendar option. Let the calendar load.
Once the calendar is loaded you should adjust the calendar time to your own time if it not showing by default. This will ensure that you can execute my strategy at the right time. In order to change the time of the forex calendar, all you have to do is select the proper one in the top right corner of the calendar where it reads current time. The drop-down menu has all global time zones with major cities as an example so it should be very easy to find the right one for you. The next thing you have to do is click on the today button in order to view today’s events only. It can be a rather long lost if you look at the entire week.
Now this step is optional as I know there forex traders who prefer to only trade certain currency pairs. In my opinion this makes no sense as you never know where the next trading opportunity awaits. In the top left corner is a button labeled filters. Click on it and then under country on the left side, click select all. After that click on which is located at the bottom and you will see all fundamental releases which will be announced for today’s trading session. You may not trade all currencies, but keep in mind that a release in one country may have an impact on another, for example Chinese economic data for the Australian Dollar. You will notice that next to the flag of the country for each currency, there is a row right next to it with up to three bulls. This indicates the severity of the expected impact of the release. One bull is low impact, two bulls is medium impact and three bulls is high impact. I noticed that my strategy work for high impact releases so I recommend that you find them next and see which of your currency pairs this may impact as well as the time of the release. Create your list and take your time, this is best done first thing in the morning in order to capture as many trades as possible. The final step is order placement. During high impact trades, price action can go crazy in both directions so I place trades in both directions. Let’s say that the EURUSD will be highly impacted and that the price is currently at 1.1350. I will place a buy limit order at 1.1355 with a take profit of 1.1370 and a sell limit at 1.1345 with a take profit of 1.1335 with the same lot size. This needs to be done prior to the release and without a stop loss. The wild swings often execute both trades and close them for a profit. 15 minutes later, add your stop loss if the position is open and delete your pending orders if you have them. This works profitably roughly 15 out of 20 times. Enjoy!
