trade breakouts on the news
Forex Strategy Trading breakouts on the news
Forex Strategy Trading breakouts on the news : it is no secret that the impact of important news on the forex market is sometimes very great , on the basis of this Most forex traders generally are always trying to be at the monitor screens to their door, hoping to receive at least some income.
But oddly enough, you can not do hardly any who (for many reasons: "no price", "no connection" with the trading platform, "Trade context busy" or a pending order to work, but market price, which differs by 30-50 points at times of declared - in the end the deal is, or Khaya, or only low traffic news - and it involves sometimes for a very large losses for traders trading in this way ), on this basis - only a handful of traders never ever did make a profit on navostyah (by accident, or go to the very large tricks and tricks to make a profit. But these tricks in the end anyway and suppresses DC (and sometimes even does not pay these earnings, as all these companies earn extremely beneficial not for several reasons and mostly about such situations, warn the trader at the signing of the contract ...)).
to important as the forex news are in the main economic events of the following:
1) Changes in rates of central banks : FOMC, ECB, BoE, BoJ , etc.
3) Announcement of Fed meeting minutes
other economic events, too, sometimes move the forex market, but they generally have much less effect on it, so there is less likelihood that the market price will go far.
During these events, forex, best to use a strategy of "breakthrough." This forex strategy, we consider the method break , which was designed to give traders the opportunity to profit by trading on the news , the currency pair "sharp" moves in one direction, due to market reaction to economic news.
Figure 1 - Foreign Exchange EURUSD
In Figure 1 you can see 5-minute chart of the currency pair EURUSD . For the forex strategy we need only 5-minute price chart . As well as two sets of Bollinger bands (Bollindger Bands):
1) Bollinger Bands with a deviation of - 2.5
2) Bollinger Bands with a deviation of - 1
look at the schedule before going out important news, the price on the chart as it slips in almost a straight line, and after the release of important news begins its movement. Candle is rising sharply in the same direction and next 3 candles on the chart make lower lows .
after 15 minutes after the release of important news if candle closes with lower minimums for each 5-minute candle , when every other Japanese candle closes outside the shadow of the previous candle, We will conclude the transaction in the direction of a breakthrough.
In Figure 1, the first horizontal line represents our entry into the market at a price of 1.5522. Our first profit target is always equal to 30 points, while the initial stop and put on 30 points . We make a deal with 2 lots (if your deposit forex is not so great, you can sell lots respectively 0.2 or 0.02 lots on a micro-FX). After will be achieved the first goal, stop-loss move to "zero", ie breakeven . And now we come to the aid Bollinger band indicator.
space between 2 1 and 2.5 standard deviations indicator Bollinger bands will be used as the level of exceptions to a warrant. If Bollinger is still directed towards implementing a breakthrough, but the price is within them, we still remain in the short trading positions. exit trading positions is determined by the behavior of price in relation to the Bollinger band indicator and implemented upon the occurrence of any of these two specific conditions:
1) if 60% of the body of a candlestick falls inside the band with a standard deviation of an indicator Bollinger (purple line on the graph) or
2) the whole candle is within or between the lines with a standard deviation of an indicator Bollinger
In any of these cases the transaction should be closed. In our case, on the 2nd lot was received 90 points and 30 points of profit on the 1st lot - as a result within one hour of trade we have earned 120 points profit!
Figure 2 - The currency pair AUDUSD
In Figure 2 we can see how this method is applied to a 5-minute chart of currency pairs AUDUSD. The price is very well kept by sharp fluctuations before leaving the important news. After the announcement of the news, rushes down the candle, the second trading candle closes below the shadow of the first candle, and the third candle makes it all much lower minimum. Entering the market is carried out at the opening of the next candlestick at a price of 0.9547. Our initial goal of 30 points was quickly reached on the price level of 0.9517. The second goal of rpibyli fixed once the price returns to the area between the strips with a standard deviation of 1 indicator Bollinger gives us another 26 pips. The total profit for this trade deal was + 56 points less than 1 hour trading.
Figure 3 - The currency pair USDJPY
In Figure 3 you can see another example on the currency pair USDJPY. Look - a pair of very quickly grew, having carried out the closure of the 2nd candle outside the shadow of the 1st candle and third candlestick showed a much higher maximum. Entering the market at a price of 105.02 is perfect. Profit in 30 points from the 1st lot was obtained after 10 minutes, and then move a bit attenuated, but after about 45 minutes we close another 32 points for a total profit of 62 points in just one trading hour .
Conclusion for Strategy Forex Trading breakthroughs on the news :
sure to wait until they all close down three 5-minute candles , and make sure that the 2nd candle necessarily closed beyond the minimum or maximum of the 1st trade candles in carried out according to the direction of the breakout in the market. And make sure to move stop loss to breakeven, that is, in "zero" after you reach the first profit target (30 points) and then just watch the price movement outside the space between the strips with a standard deviation of 1 indicator Bollinger.