generally I step clear ................its gambling during that news release period .....spreads stretch and you will get hurt......
stay clear and don't gamble
N
I cannot give you a simple black or white - yes or no answer with regards to every news release - but as NVP says - normally I would agree and be out of any scalp or short term intraday trades 5-10 mins pre news and just wait and watch the first part of the reaction whilst sitting on my hands.
I only trade FX pairs and for me - to make consistent monies on a session to session basis - you cannot just treat any part of trading as simple or easy - it is if you are just having a "punt" - but if you are a serious intraday trader there are so many factors to consider in a dynamic market place.
First question is maybe even ranking the red news announcement - as some red news high priority announcements might just have an effect on just a few pairs and not across the board. For example we all know the NFP on one freaky friday at the start of every new month will have normally a big effect on all major currencies.
But you can have major announcements on say the Australian or New Zealand dollar - and still stay in swing trades on the GU or even the EU.
When I am scalping or just short term intraday trading taking trades that should complete within 30 -60 mins - I will chose pairs according to the news calender of the particular day. ie most UK Pound red news announcements might happen at 9 30 am UK time or between 10 am and Midday. So from both the EO and the LO you might get a "pre news" set up - ie a move set up by the market makers to take the pound up in price by say 25 to 40 pips over a course of an hour or two.
I would stay with an up move if my technical set up says its still scalp bullish right up to between 3 and 9 minutes before the actual release . In fact the last 20 mins before news can be good as the market makers know most intraday traders will not be in the trade and feel its too unsafe to jump in with only say 10 mins to go.
Then after a "pre news " set up - suddenly you might find the news sends the pair 40 -70 pips the other way with a one way spike. If you are with a spread betting bucket shop - yes you can trade it on demo - but on live - you will not get the price you want - and then once you are in - you might find it can be 2 to 3 mins before you can get out if you are on any decent stake size - and then not at the price you want.
I have traded secondary red news announcements with a ECN or STP broker with both good and bad results. The good results will come if the direction is clear and the news is as expected and the 2 way prior spikes are reasonable ie only 5 -10 pip stuff - but when you get a 25 or 35 pip spike up or down followed by a 70 pip spike up - all under 30 seconds - then really - you need either big bolls along with big stops etc and be praying - ie not the way to trade.
There are ways to trade red news release and my own way is to wait normally 3 to 9 minutes after the release and works out the size of the pullbacks and whether the PA as legs or whether it will all fiizzle out and go back into a range within 20 -30 mins - before another move - either way.
Remember FX is a big money game - and you can have 50000+ retail traders buying the EU at or after news and the TA and the PA clearly say it going up and it does 15 -30 pips - and then one player / Bank etc says - I want to sell from that price at this time - and then just tips the table up and takes the pair the other way by 70 -100 pips all within 30 -60 mins.
If you are a swing trader with big stops and after say 250 -500 + pip targets - then you possible dont bother about most red and less major news announcements - as you fell clear on a direction and so will ride the effect etc .
If you swing trade with stops under say 30 pips with targets of say 70 -150 pips - you need to check the weekly calender and ideally chose the period you enter your trade - as you dont want to be up say 40 pips in profit in the early morning and then see after news and in the US session you are testing your stop area.
Believe me - this is a short answer - I could go into the real detail of how you can benefit from important news releases both prior and after the events and all the clues and signs to look out for to help you with your decision making etc - whilst totally ignoring Bloomberg / false order flows / rumours etc etc - but most traders prefer KISS etc - so maybe its best to not even go there
Hope that helps from how I see it from my own perspective
Good Trading
Regards
F
