Today was fun trading. This week I have been listening to the live trade calls at www.forexrazor.com just to test out their service. This trader strictly trades the news, meaning, he waits for important economic data to be released and if the data deviates from the expectation he immediately will place a trade depending on the price action. Pheww!! It is fast and furious this type of trading, and usually is just going for about 10-20 pips. Unfortunately his method today lost him a few pips on GBPUSD because the price action immediately after the USD ISM news release at 10am EST was so volatile. I prefer to WAIT an entire 5 minute candle to close before making any trades after heavy news data releases like this. The great thing about news trading is you can visit www.forexfactory.com to see the current list of news events scheduled and then next to it they give you the importance or expected volatility associated with it. So today, for example, the US ISM non-manufacturing data shows RED for “very volatile”. I personally like to trade JPY pairs for news trading, they move alot. So precisely at 10:05am, at the 5min candle close, I entered a Long GBPJPY trade at 206.10 and took profit of 95 pips in about 15 minutes. Not bad!! after 3 candles of retracing, price started to continue up again, also following the US stock market index, the Dow. So I reentered another Long GBPJPY at 206.80 with a target now at the hourly 200ema. Another 80 pips in my pocket in 40 minutes. Now here is another good trading idea that works often: If price rockets up to hit the hourly 200ema and stalls, it will likely retrace. So I entered a Short trade on the GBPJPY at 207.30 for 50 pips profit. I probably could have gotten more on the Short by entering quicker at the hourly 200ema, but no big deal. That was +225 pips today! Today was all about news momentum and then retrace, pretty typical currency moves. It helps to wait those 5 minutes after a new release to see the price action, then dive in. Safer that way
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