How to Trade the News_ By Using Strike Trader Elite System
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LifestyleTranscript
00:00Now let's get into news trading. News trading is my favorite thing to do. I
00:05don't put orders on before the news hits. I'm not into bracket trading news. You
00:12can do that, that's just I feel I don't have to do that. So if I want to do some
00:18manual discretionary trading throughout the day, what I typically do, my first
00:23order of business is, as you can go to, you know, there's many websites out there
00:28but let's go with a tried-and-true. Let's go ahead and take a look at forexfactory.com.
00:34So looking at forexfactory.com, clicking on calendar, you can also
00:40click on this time window to adjust your time zone and whether you're on daylight
00:47savings time or not so that your time that you read here on the chart
00:51synchronizes with wherever you are in the world local time. You know, I always
00:57pay attention on a day-to-day basis. Where are my orange folder and red
01:03folder items? The news reports that are most likely to cause some energy to come
01:09into the market and cause a reaction. And the ones that I really like, I love
01:15central banker news, you know, interest rate news, interest rate meeting news, GDP
01:22numbers, inflation numbers, employment numbers like nonfarm payroll, Canada's
01:30employment news, Britain's employment news, Germany. Anywhere where there's
01:35prominent news items hitting the market, those are the times I'm gonna go be ready
01:43and it's real simple. Like for instance, on Wednesday, May 9th, there was a PPI
01:49news that was gonna hit at 730 central time, Chicago time. We had oil inventories
01:56at 930, great news item if you trade oil on your, you know, MT4 platform through
02:04your broker. If you're trading a New Zealand dollar related pair, there was
02:10major news official cash rate and their monetary policy statement at 4 in the
02:16afternoon U.S. central time and so on. So what I do is I know going into the
02:22next trading day, I already have in my mind, okay, I'm gonna pay attention to U.S.,
02:29you know, the euro, the British pound related pairs at this time and at this
02:35time I'm gonna watch some pairs tied to the New Zealand dollar. Here we had China
02:41CPI and PPI news, you know, that will get a reaction out of the Japanese yen, the
02:47Australian dollar, the New Zealand dollar at times. So it's always these orange
02:52folder or red folder items. So I literally week to week can go pick times
02:58where I know I want to be paying attention to the market when the market
03:03isn't reacting to key support and resistance levels. I don't want to sit
03:08there and watch the charts for eight hours a day. I'm gonna pick and choose
03:11and a lot of times these key news events drive price into key support resistance
03:19levels. It's, you know, it's just how it works. Energy comes into the market, moves
03:24price to an area where there's gonna be a reaction. Now what I'm looking to do on a
03:29lower time frame chart with a news item, say a news item hits, let's say there's
03:35British pound news. I'm on the five minute chart that day. British pound had
03:40signaled a long setup, it activated. So there's been some positive upside
03:46momentum in the British pound. Then news hits, we get a little bit of a whipsaw
03:52down and then we get some lift. So we're getting into a news environment, a news
03:56reaction. So how I like to trade news items is when I get a bar close where I
04:05can see there's been a prominent reversal or some energy coming into the
04:09market, I'm not just gonna jump in at the bar close and go long and say okay
04:15let's see what happens. I'm gonna follow that energy of price and when the bar
04:19closes I'll go and I'll set a buy stop. My, you know, I'm on a five minute chart.
04:25I'll put a buy stop about 10 to 12 pips above that bar close. So I'll set an
04:32order up here like a buy stop. I'll get ready to drag down the order and lay it
04:37right about 10 to 12 pips. Doesn't have to be super precise, just, you know, I can
04:43look over the side and see what about 10 to 12 pips are. I'll put a buy stop in.
04:47If price can maintain that momentum and come up and tag me and
04:53fill me, then I'm in the trade. I'm now long in the market. I'm playing the long
04:59side out of a reaction to news. Now I'm not jumping in 10 seconds after news.
05:07I'm waiting till I get a good strong bar. I had a reversal bar on a five
05:13minute. Now I have a power bar, a bar that, you know, closes near the high and I'm
05:19already in an environment of upside momentum. If you have access and you also
05:26have the FX push indicator, I can see momentum is starting to build. So
05:32there's stronger upside momentum and they're starting to be
05:35dissipating downside momentum. I put price 10 to 12 pips away from a bar
05:42close and I see if the market can carry that news based momentum into my order. I
05:48get filled as soon as I get filled. Whatever my typical risk is that I would
05:55use on a five minute chart, I would never put a stop any less than about 15
06:01pips on a news related trade. What I like to do is typically trade the most recent
06:08price pivot, especially if that was a pivot made by news. Now if this is a
06:12hundred pips, I'm not gonna put a hundred pips stop. You know, 20 to 30 pips is
06:17about my maximum stop that I would ever use on a five minute chart trading a
06:22news item. So I might just say, okay, if I get triggered in the trade, I'm willing
06:27to put my stop somewhere in the body of that power bar or at the bottom, but I'm
06:33not gonna exceed 30 pips. It's just, there's, it's not needed. There needs to
06:38be instantaneous follow to it. And when I do get followed through, I'm gonna bleed
06:42out that risk. So let's go ahead and color this red. This is my stop. I've been
06:51buy stopped into the market. The market went up, hit a buy stop that I had
06:55resting. I'm filled at that price. I'm long. Market carries through into bar,
07:02starts running away from my position. Now that's my risk initially. So the
07:08minimum I should be going for is about two to one. I always like to target a
07:14minimum two to one reward to risk. So we'll just ballpark drawing about what
07:19looks like two to one to me. And we'll go ahead and color that. So now I know
07:25where I, where the market needs to go to, where I would think about taking off a
07:30portion of the trade or just closing out the trade and calling it good. Especially
07:35if it starts to grind and take a while to get there. When it gets there, I'm
07:39gonna take a portion of that trade off. If it just keeps driving right on through,
07:43I'm sitting on my hands. You know, I'm letting price tell me what I need to do.
07:49Soon as price gets about to my one to one point, so let's say I had, just
07:55arbitrarily say I ended up having 28 pips of risk on. And the market gets
08:00about 28, 29, 30 pips in the money, I'm moving my stop to break even. There's no
08:05need to have risk on anymore if I'm at my one to one point. So now I'm sitting,
08:11waiting, waiting. I had one prominent pullback lift, prominent pullback with a
08:16pivot lift. Now it's lifting, it breaks above this highest price achieved since
08:22the news release. It's pressing higher, I'm moving my stop up below the most
08:26recent pivot. I've locked in some profit. Pushes, misses my two to one, goes
08:32sideways for a bit, gets a second wind of some upside momentum, comes up, tags my
08:38two to one area. So as soon as it's up near the two to one area, if I'm not
08:44closing out my entire trade, I'm gonna put my stop anywhere near these most
08:49recent pivots. Price goes up, I take some of my trade off. Why? Well, it didn't just
08:57power up through, you know, we had a big pulse move and we grinded higher, but we
09:03don't have energy maintaining in the move. Yes, the market's moving upwards in
09:10a, you know, in a stair-stepping manner, but the authority of the initial move is
09:14dying off and I can see my trade intensity has really died out and I'm
09:19even getting some challenges as I'm pressing higher. So sellers are willing
09:25to come in and slap that upside pushes and they're slapping price as it's going
09:31higher. Sometimes that slap down is just those that got into the move or are
09:36selling to cover and unwinding chunks of their trade. Now, if I had my stop in this
09:43area, market came down very near, would have gotten very close to stopping my
09:48out, holds, starts lifting higher again. I know where my two to one point is. It
09:58presses beyond the two to one. Any stop I had there, I would be moving it higher.
10:04First here, as price comes up and starts pressing above the previous highs, I'm
10:10moving my stop higher to the next most recent pivot as I stair-step higher, but
10:16when I get a press, a slap down rejection and a press, anytime price goes up and
10:22challenges a prior high and can't press through and comes down, I'm always of the
10:27mentality that I'm looking to extract and thin down my remaining position. So I
10:33would be closing out or taking off any substantial portion of my position still
10:39on, maybe leaving about a third of the trade on max. Eventually it comes down and
10:44just stops me out and I made money on the trade. Now, there's other times when
10:51you could get a news release and then you just get a signal to trigger. That's
10:55fine. You can work those. Just I don't like to take signals in the first five
11:01minutes or 10 minutes out of a news release. I like to see if the move will
11:06maintain momentum and if it does, if the move does continue, you usually have at
11:12least one additional pickup point where you'll get a kickback against the move
11:16and then it will roll over and continue and you can usually get another signal
11:20entry. So I like to take a long setups when there's upside momentum showing on
11:30the pulse indicator. I'll take short setups when there's downside momentum. So
11:36I'm not going to work a short setup when I'm still detecting upside momentum.
11:39I'll wait for a regular signal pulse trade signal or I'll wait till we're
11:47already in some downside momentum and see if that move can continue or
11:52give me a secondary entry. So trading news is the good thing about trading
12:01news. It's very efficient. You can go look at the calendar, pick your times to watch
12:06the market. If you're watching two pairs, four pairs, six pairs, especially ones
12:12that are most correlated to what news is hitting, you're usually, if the news
12:18causes a reaction, sometimes news hits, sometimes news is within expectations
12:23and there's not much of a reaction. And then there's times when the news
12:27surprises the market and you might get a pulse like this and three hours later
12:31it's still going. So you just have to take what the market gives you. But the
12:38more energy that's in the market, the more I like to be active trading. When
12:44the market is doing this and going sideways and there's not a lot of energy,
12:48I'm not excited to be trading setups. I trade that market when I know there's
12:54going to be energy. Price reactions to support and resistance levels, price
13:00reactions to news releases. So those, in my opinion, are the two best times to go
13:06in and target trades with the system and with the overall trading tools that are
13:12part of the STE package, the Strike Trader Elite trading system. Just wanted
13:19to cover news. That's how I like to cover news. We'll add more content going
13:24forward. We'll show you more examples. But at least now we've given you the basics
13:28of how the system works after you've loaded it to your charts and then when
13:33we like to go out and target trade setups as we work trades in the FX spot
13:39markets. There you have it. If you have any questions, just contact us. And that
13:44is trading news.