In this case, if you sold the EUR/USD pair upon the release of the news, you would have earned 20 pips in 15 minutes. When trading the news, a simple forex trading strategy would be using the high-impact news releases that give a comprehensive overview of the economy, such as the employment situation or GDP. Some indicators have low impacts that can be negligible, while others are high-impact indicators, resulting in extreme volatility.

These economic indicators are arranged according to their release time.įurthermore, the economic calendar categorizes the indicators depending on the magnitude of their expected impact in the forex market. The economic calendar collates thousands of economic indicators from different sources and streams them in real-time as they are published. So, how does one know when the economic fundamentals have improved or deteriorated? By using the economic calendar. Conversely, when the economic fundamentals deteriorate, its currency should be expected to depreciate in the forex market. In this case, when the economic fundamentals of a country improve, it means that its currency will appreciate relative to others. Therefore, a country’s currency can be said to be a reflection of its economic situations. Remember that the price of a currency pair shows the value of one currency relative to another. This sentiment in the Forex market originates from the fundamentals of a country’s economy. The sentiment of the traders primarily drives the prices in the Forex market. Furthermore, you can also set your stop-loss levels by using prior support and resistance levels.įorex Trading Strategy 3 - Trading the NewsĪs a forex trading strategy, trading the news is more suited for traders who would not conduct tedious technical analyses. Since this strategy is popular during volatile conditions, the best way to plan an exit is by using trailing stops. For example, if you are a short-term trader, your support and resistance levels can be set within intervals of 30 minutes. How to Establish significant Support/Resistance Levels?įor the breakout forex strategy to work, you need to establish accurate support and resistance levels, depending on the timeframe you are trading.

This strategy is popular, especially when the market is volatile. Trading the breakout strategy involves opening a long position when the price breaches the resistance level and a short position when the support level is breached. Therefore, it is the highest high attained by an asset over a period.

A resistance level is where the price has not moved past in a specified period in a bullish trend. Resistance is a price level where a bullish trend seems to bounce off of it. i.e., it is the lowest low an asset has a trader over a period. It shows the price level where a currency pair has not moved below for a specific period. A support is the price level formed after a while where a downtrend seems to bounce off it.

Simple forex strategy that works