How Do You Trade Around Economic News?

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My question is in regards to Economic News with a definite time table that can be followed on an Economic Calendar.

How do you trade around such news? For example today at 8:30 am the Non-Farm Payrolls came out worst than expected causing a downward spike in the USD.

I trade the USD/JPY pair and usually set a trailing loss of 20 pips before major Economic News comes out. I figure if I'm wrong it will cost me only 20 pips in the direction I'm betting, but if I'm right I stand to gain more.

Is this correct approach? Or am I better off just not having a position when Economic News is about to be announced? For the more experienced traders out there, how do you handle Economic News?

 

I generally don't trade high impact events like that, I am too afraid of whipsaws.

 

However, if you have analyzed definite economic events minutely and you surely know about the outcome, you can open position at greater volume. Of course there is always risk, but look for correlating currency pairs, their behavior, and thus you can confirm or refute your intentions before you actually enter the market.

 

hi there, watch this great idea that you will get...https://www.youtube.com/watch?v=XfRgCIy4pVo

 

thanks for the reply guys! appreciated

 
Reifolg:
However, if you have analyzed definite economic events minutely and you surely know about the outcome, you can open position at greater volume. Of course there is always risk, but look for correlating currency pairs, their behavior, and thus you can confirm or refute your intentions before you actually enter the market.

That's a good idea, actually. It hadn't occurred to me to do that.

Do you use stop loss when you're trading news?

 
dianajs:

That's a good idea, actually. It hadn't occurred to me to do that.

Do you use stop loss when you're trading news?

I have been trading with news releases and i use Stop loss because that is the only way to keep our trading accounts safe in the case our trades have gone wrong

 
Bruce Mendes:
I have been trading with news releases and i use Stop loss because that is the only way to keep our trading accounts safe in the case our trades have gone wrong

Unless a whipsaw closes your position because of the stoploss. I've seen it happen, unfortunately.

 

I don't trade any news, I stay away from market if there is a big news arriving.

 

Don't trade them. I will tell why. You don't want to trade events that may come surprising.

The key to success is to have the odds in your favor.

 
Lately I have also been avoiding trading during important news releases. There’s a huge risk involved in market movement responses. You should understand how the news releases affect the market and how it will impact the direction of the currency. Even if you are aware what the news announcement will be you can’t predict how to market will actually react to it. If still you would like trading news you should be able to evaluate the information in a fast enough manner and to protect yourself from emotional extremes.
But I also agree that even if news trading is risky, trades around news events which are handled properly could be extremely lucrative.
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