With Forex fundamental announcements are what seem to give the currency pairs direction, there are over 500 Forex news releases a month so theres always something to trade.
There are two ways to trade the news, one way is to do it on a technical basis looking to see when the news will be released and then placing an OCO (One cancels the other) order just before the release. To Trade this way you need to look for pivot points, Pivot points are areas of extreme support or resistance. Once a pivot point is broken usually it means the trend will continue in that direction.
This will catch a large part of the profit which ever way the news goes and possible keep you safe in case of revisions, revisions are when the analyst realises he got something wrong last time and announces it just after he gives the current months figures.
The most common news announcement this happens on is NFP (Non Farm Payrolls) which by coincidence (or maybe not) is the largest release of the month, you really don’t want to get caught out on this Forex release as it can regularly retrace 80 or so PIPS (Price interest point), depending on your broker the speed at which it moves could cause slippage, which means your stop loss won’t be filled Arrrrgh!!!!!
The way I like to trade the news is the exciting way, you’ll need to find a good reliable Financial calender, see what news is being released and what the consensus figure is, see whether the news is going to good or bad for the respective countries economy.
Then you need a fast news feed you want the news before anyone else, then you can get in on the trade for maximum profit. You could sign up to a news feed with Bloomberg or someone but this is expensive.
Many Forex brokers offer a live news feed on their trading platforms, I would recommend paper trading some to see which is the fastest and one you feel most comfortable with.
Now you need to wait for the release if the figure comes out as the consensus I would not trade, this figure has already been priced into the market.
You need a deviation a number higher or lower than the consensus, depending on the release you’ll know whether to buy or sell, remember to watch for revisions.
Look for a major pivot point to close the trade and count your cash.