Oil Crumbles, Cable Reverses and the Dollar Continues with Bullish Structure. GBP Reacts to CB Talk as the Queen Speaks.

USD Waits for Fed Speakers; NZD Vulnerable to RBNZ. Gold, USD Strong Inverse Correlation and in Confluence.

FTSE Further Develops Range on Sharp Turn Lower. Dow Jones Industrial Average Struggles to Hold the Gap Higher.

Trading news announcements like N on-Farm Payrolls can be dangerous, and to anyone going into a news release without fear of how badly an account can be ravaged by volatility should probably avoid doing so, and instead — wait for quieter markets. But to the trader that always protects their downside , adheres to strong money management , and protects their account by avoiding the number one mistake Forex Traders m ake — News announcements can offer compelling opportunities for a lot of movement in a very short period of time.

Rampant volatility that can typify news events; created by J. An announcement like NFP Non-Farm Payrolls can bring some significant movement as much of the world is watching this figure for signs of future direction. At 8AM Eastern Time, approximately 30 minutes before the NFP announcement the trader can plot support and resistance based on price action. This can be done by observing the past few hours immediately prior to the release, and drawing a rectangle around the high and the low that was hit during this period.

This can be done on the 5, 15, or even 1 minute chart — the high and low of this time period will be the same. As you can see, for 14 hours leading into Non-Farm Payrolls in April price respected a 25 pip range. The reasons for this can be numerous; key amongst them is the fact that liquidity providers and market makers that set the prices we can execute our trades against are cautious of NFP as well.

They fully realize that a surprising number can spark a rally or a sell-off in a very short amount of time. And leading into the announcement, any significant positions taken on by liquidity providers or retail investors executing trades bear significant risk.

Live Forex Analysis, Currency Rates, Economic Calendar, Technical Forecast, Fundamental News, Free Trading Signals. Best. USD Dollar, EUR Euro, JPY Yen, GBP Pound, CHF Swiss Franc, CAD Canadian Dollar, AUD Australian Dollar, NZD New Zealand Dollar - Action Forex

Below is a chart of EURUSD ahead of the March Non-Farm Payrolls report. Notice, the same type of phenomenon takes place here, as the market stays range-bound leading into the announcement.

Set Entr y Orders.

The one thing we know, for certain, going into a news announcement is that there will probably be volatility. Predicting which direction that volatility may move is what makes trading news difficult. The picture below will illustrate more fully: What if price comes down to open up our short position, and then moves directly back to prior resistance to trigger us in a long position?

For traders in the United States, where FIFO First in-First Out execution is the standard, it may close out our short position at a loss. So going into the trade, you have to know how you would want this situation handled.

That way, when the short position is entered into, the long entry gets canceled. Because we are anticipating volatility during a fast-moving environment, it behooves us to add proper risk management parameters in our trades. We have to keep in mind that The Number One Mistake that Forex Traders Make is risking too much to make too little. Directly from the Traits of Successful Traders series compiled by DailyFX, David Rodriguez states: Because we have identified support and resistance previously when setting up our entry orders, we can look to place our stop on the other side of the range.

So for the short entry looking for breaks of support — stops can be placed slightly above resistance. For the long entry hoping for breaks of resistance — stops can be placed slightly below support. If you are risking 50 pips on the trade idea, look for a minimum of 50 to make sure that is worth your time. Many traders will look for far more than the number of pips risked, seeking a much higher risk-to-reward ratio such as 1-to-3 50 pips risked, pips sought or 1-to-5 50 pips risked, pips sought.

Trading Double Spikes "Price Action" 50 of To contact James Stanley, please email Instructor DailyFX.

Japan 'will take necessary forex action' | Inside Japan Tours

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