Forum transfer: Submitted by gibson on September 28, 2007 - 21:29.actually, one can trade the news with consistent success. it is one of the few trades that are consistently profitable - if you do it right.
find the news releases coming up by using the good economic news calendar at
http://www.forexfactory.com/calendar.phptrade only the "red folders"
note the price movement/pattern a few hours before the news release. is should be in a narrow horizontal consolidation pattern. if not, do not trade it.
you need to be watching the one and five minute charts. place lines above and below the consolidation to "box' it.
get a directional momentum, indicator like metatrader's "waddah attar explosion". the histogram increases as momentum occurs and the color is green for upward momentum.
when it goes, you go. hopefully your broker will fill you at a good price, but probably you will get a requote. just accept it without looking at it. speed is important here.
and don't jump the gun before a true direction appears - the price will go in both directions at first.
the benefit of the news trade is that, once it does get going, it does not whipsaw back and get you.
exit with a trigger indicator or at a pivot point. don't jump back in if it keeps going.
now use a fib to measure the inevitable retracement. do not trade it back down. but after it bounces from a fib level, you can get in again and get a second trade in the same direction.
good luck,
gibson