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The document outlines effective news trading strategies for Forex, particularly focusing on high-impact events like NFP and CPI. It details three strategies: the Straddle Strategy for quick moves, the Retracement Strategy for safer entries, and the Momentum Breakout for capturing strong trends. Key risk management tips and recommended currency pairs for trading are also provided.

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9 views3 pages

New Pachment

The document outlines effective news trading strategies for Forex, particularly focusing on high-impact events like NFP and CPI. It details three strategies: the Straddle Strategy for quick moves, the Retracement Strategy for safer entries, and the Momentum Breakout for capturing strong trends. Key risk management tips and recommended currency pairs for trading are also provided.

Uploaded by

yasharchit23
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Best News Strategy for Forex (USD/JPY & Other Pairs)

News trading is one of the most volatile and profitable strategies, but it comes with high risk. The best approach depends on
execution speed, risk tolerance, and market conditions. Below is a proven step-by-step strategy for trading major news
events like NFP, CPI, FOMC, GDP, and Interest Rate Decisions.

1. Choose the Right News Event


Not all news moves the market significantly. The best events for USD/JPY and other pairs are:

High-Impact News Events

📌 Non-Farm Payrolls (NFP) – First Friday of every month​


📌 Consumer Price Index (CPI) – Inflation Data​
📌 FOMC Rate Decision – Interest Rate Changes & Powell Speech​
📌 GDP Growth Report​
📌 Unemployment Rate
👉 These events cause massive volatility in USD/JPY, USD/CAD, and Gold (XAU/USD).

2. Pre-News Preparation (1 Hour Before Release)


✅ Check the Economic Calendar – Use ForexFactory, Investing.com, or Myfxbook to see expectations vs. previous data.​
✅ Mark Key Support & Resistance Levels – Identify breakout zones.​
✅ Analyze Spread & Slippage – Use a low-spread broker (ECN accounts work best).​
✅ Avoid Holding Trades Overnight – High slippage risk.

3. Strategy 1: The Straddle Strategy (Best for Fast Moves)

How It Works:

●​ Place two pending orders (Buy Stop & Sell Stop) above and below the price before news.​

●​ If the news creates a big move, one order triggers, and the other is deleted.​

●​ Targets 20-50+ pips in seconds.​

Setup:

●​ Pair: USD/JPY or GBP/USD​

●​ Timeframe: 1-Minute Chart​

●​ Entry:​

○​ Place a Buy Stop 10 pips above the price.​

○​ Place a Sell Stop 10 pips below the price.​


●​ Stop Loss (SL): 15-20 pips.​

●​ Take Profit (TP): 30-50 pips.​

●​ Delete the opposite order once one is triggered.​

🔥 Pro Tip: Use a VPS or fast execution broker to avoid slippage.

4. Strategy 2: The Retracement Strategy (Safe & Reliable)

How It Works:

●​ After an initial spike, the market retraces before making the final move.​

●​ Wait for the price to pull back to 50% of the spike, then enter.​

●​ This works best when the news confirms market expectations.​

Setup:

●​ Pair: USD/JPY, XAU/USD​

●​ Timeframe: 5-Minute or 15-Minute Chart​

●​ Entry:​

○​ If price spikes up, wait for a pullback to the 50% Fibonacci retracement level and enter a buy.​

○​ If price spikes down, wait for a pullback to the 50% level and enter a sell.​

●​ SL: 15-20 pips.​

●​ TP: 40-80 pips (or next resistance level).​

🔥 Pro Tip: Best for traders who avoid slippage but still want to profit from news.

5. Strategy 3: The Momentum Breakout (For Huge Moves)

How It Works:

●​ Wait for the first 5-minute candle AFTER the news release.​

●​ If price breaks above or below the candle, enter in that direction.​

●​ This strategy captures strong trends after the news shock.​

Setup:

●​ Pair: USD/JPY, EUR/USD​


●​ Timeframe: 5-Minute Chart​

●​ Entry:​

○​ If price breaks above the first 5-minute candle, enter a buy.​

○​ If price breaks below, enter a sell.​

●​ SL: 20-25 pips.​

●​ TP: 50-100 pips.​

🔥 Pro Tip: Works best when the news confirms a strong trend (e.g., FOMC hikes rates → USD strengthens).

6. Key Risk Management Tips


✅ Trade with a Stop Loss – News moves are unpredictable.​
✅ Reduce Lot Size – If leverage is high, use small position sizes.​
✅ Avoid Trading Before the News – High slippage can stop you out.​
✅ Use a Fast Broker – ECN brokers with low latency help avoid order execution delays.

7. Best Pairs for News Trading


🔹 USD/JPY – Moves aggressively during FOMC and CPI.​
🔹 GBP/USD – Great for UK and US data releases.​
🔹 EUR/USD – Strong moves on ECB and US data.​
🔹 XAU/USD (Gold) – Volatile during inflation reports and FOMC.

Final Thoughts
The best news trading strategy depends on how fast you can execute trades and how much risk you're willing to take. If you
prefer fast breakouts, use the Straddle or Momentum Breakout strategy. If you want less risk, the Retracement Strategy
is better.

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