News trading has become quite popular in Forex in the last few years.
Mostly because it offers an opportunity for traders to make a quick gain (based on the volatility generated by traders and investors trying to get a piece of the movement).
But the questions is, could it be possible to get positive and consistent results trading the news? I don’t think so, and here are the reasons.
There are two common strategies used to trade the news:
- Straddle Technique and
- Trading based on the deviation between the expected and the actual figure.
1. Straddle Technique
This technique consists on placing two entry orders before the fundamental release, an order to go long above current market activity and another one to go short below current market activity.