Trading Forex news events successfully will require that you invest significant amounts of your resources and time. Expert consensus also recommends that you undertake a serious study of the historical performance of every economic data item that you plan to trade. This is because you will then acquire an appreciation about how a release functions and what to expect at its next posting.
For example, if you observe that a particular news item is prone to generating whipsaw price actions then you may conclude that it is best left alone. However, when you perform such investigations you must realize that historical data is just a guide and you should not expect it to forecast future movements with total accuracy. You must also be aware that this type of trading is capable of generating serious price surges.
If you plan to design a Forex trading strategy about news releases then you must first record the scheduled dates and times of all major economic data postings. You should also identify the ones that can generate the largest price movements. For example, if you can detect that Forex experts are forecasting a certain result from a particular economic publication, then you should be able to verify their recommendation by detecting that price has started to drift in the biased direction of their prediction.
Consequently, you should only trade in this preferred direction prior to the posting. You must also ensure that you capture all your profits when price touches the opposite side of its ranging range. You may find that you will have to activate numerous trades targeting small profits if price is trading a tight channel.
You must not make the mistake of actually trying to predict the result of any economic data release. This is because the factors involved are very extensive and the resultant calculations complex. Instead, you should evaluate the probabilities of how price will react to these events. Despite all the difficulties, trading the news can be a very profitable activity, if you can master it.
Many experts recommend that you are must acquire a good appreciation at trading the news by first utilizing a demo account before going live. You must always be on your guard because volatile economic releases can generate sizeable price spikes which are very difficult to trade unless you are a Forex expert.