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Trading the news announcements

Almost every day there are economic announcements for different countries. Typically, these take the form of important economic data like GDP or inflation and the ever volatile Non Farm Payrolls on the first friday of the month affecting USD pairs.

It is important that we know when these take place and how important the announcement is likely to be. The more important the announcement, the more likely that there will be significant and volatile price movement after the announcement. As you already know, a good source for this information is

For those of us holding positions for long, the volatile price movement can cause your stop loss to be hit on any open trades. To avoid this you could close any open trades before any known announcement or move your stop loss to break even. Or also avoid trading altogether around these announcements.

However, if the announcement causes the price to move in the direction of the open trade, you could of course make a large profit. Some choices are to use the cautious approach i.e. close trades before the news announcement and then delete any pending orders.

Alternatively, some traders may prefer to keep trades open for all but the most important economic announcements.

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