Unfortunately, a lot of these types of traders will fail. Forex news can be notoriously difficult to trade as price movements can be so wild and volatile. Not only can these movements be unpredictable, but forex traders will often employ sloppy risk management and end up turning a short-term trade into a long-term problem.
There has to be a better way to do this.
Some traders choose to just avoid trading forex news, or those trading longer-term strategies often try to 'trade around them.' But there are a few different ways to try to "use the forex news".
For one, since these price movements can be so wild and volatile, it may offer longer-term forex traders the opportunity to get a better entry price than they would have initially anticipated.
Let's say that the EURUSD is trading at 1.3000, and a trader wants to go long with a 100 pip stop and a 300 pip profit target; but NFP is 30 minutes away and our traders doesn't want to take the risk of losing 100 pips so shortly after placing a trade designed to be open for a few days. So our trader waits...
Once NFP comes out, the trader sees price hurry down to 1.2950 before finding support shortly after the data was announced. Our trader can then buy, keeping their stop at 1.2900, and now can look for a 350 pip profit target. Their original risk-reward was going to be 1-to-3. Now, it can be 1-to-7, and they were able to get long the EURUSD at a much better price.
The other way to use
the forex news is to trade the volatility that can come from news
announcements. This involves placing an entry order to go long
above resistance, and an entry order to go short below support. This
way, if the volatility from the news release creates a price movement
that could go on for days, forex traders could potentially enter at the
early portion of the move as prices initially move on to make new highs
U.S. Non-Farm Payrolls (NFP) February 2014 :