Forex News Trading Strategies- Federal Open Market Committee (FOMC)

Forex News Trading Strategies - Federal Open Market Committee (FOMC)

I prefer trading currencies on volatility. Although some people say that forex news trading is risky, and could erase one's account in a matter of second. It is true, but I would rather see forex news trading an opportunity to make money in a very short time period.

Below is an article on "Trading On News Releases" from Investopedia.

"One of the great advantages of trading currencies is that the forex market is open 24 hours a day (from 5pm EST on Sunday until 4pm EST Friday). Economic data tends to be one of the most important catalysts for short-term movements in any market, but this is particularly true in the currency market, which responds not only to U.S. economic news, but also to news from around the world. With at least eight major currencies available for trading at most currency brokers and more than 17 derivatives of them, there is always some piece of economic data slated for release that traders can use to inform the positions they take. Generally, no less than seven pieces of data are released daily from the eight major currencies or countries that are most closely followed. So for those who choose to trade news, there are plenty of opportunities."

How I traded on the news release of the rate decision by FOMC on March 19, 2008

The picture on the left shows how I traded upon the news release about the interest rate decision by FOMC on March 19, 2008. I traded USD/JPY for about an hour 1o times from upon news release. I went short almost immediately after the direction of the price movement was confirmed.

The initial strong downward movement lasted 1 minute or so. Surprisingly, it bounced back to the original place as you can see the long candle stick in the chart soon. I managed to exit from the initial trade earning 45 pips when it shows the definite rebound move.

Then, I waited for the price to complete the rebound, and went short again, but this time I made 5 trades separately selling on the small rebounds.

Lastly, I kept going long several times. The total pips earned for this news trading this time was 92 pips. All went well.