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Master these highly profitable Candlestick Patterns with this FREE 82 page Candlestick Guide. Download a FREE COPY of te Oracle Trader Market Prediction Software. Trade the fundamental news release with the NewsProfiteer Henry Liu.

Henry Liu: I’ve decided to keep this short and sweet. If you prefer to look at the numbers and get right on to trading, then you are going to love the new format. If you want more detailed analysis, you can always read them at my blog where I share a much more detailed analysis and sometimes with a pre-recorded video to get you familiarize with trading the news…

NEWS TRADING
Thursday, August 19 2010
[4:30am NY Time]
Today’s Retail Sales number from UK will be widely watched as this is a high impact yet tradable report. Here is the forecast for this release:

The Trade Plan
Retail Sales by definition is a direct measurement of consumer activities at the retail levels. A higher release is generally good for the economy, and better for it’s currency; a lower release is considered as negative for the economy and not good for it’s currency.

Our tradable deviation or surprise factor for UK Retail Sales is 0.6% to BUY and 0.5% to SELL. If our deviation is hit, we can expect the market to move at least 50 pips within the hour, with a historical accuracy of 74%. We’ll be looking to BUY GBP/USD if we get a 0.9% or better release, and SELL GBP/USD if we get a -0.2% or worse… For Live Video of last Retail Sales and more detailed analysis including Market, and Pre-news considerations:

NEWS TRADING
Wednesday, August 18 2010
[4:30am NY Time]
MPC Meeting Minutes is scheduled to be released today and since it is customary for BOE (Bank of England) not to release a statement along with its interest rate decision (2 weeks ago) where there were no changes in either rate decision or APF (Asset Purchasing Facility, UK’s quantitative easing program), today will be the first time for a glimpse into what took place during this meeting, here is the forecast:
UK MPC Meeting Minutes Forecast 1-0-8 Previous 1-0-7
ACTION: GBP/USD BUY (2 Vote For Hike) / SELL (2 Vote For QE)

The Trade Plan
We will be looking at the vote count today. If we get 2 votes for hiking 25 basis points, we should see some strengthening in the Sterling and a BUY GBP/USD trade should be justified. If we get 2 votes for quantitative easing, or to increase the currency APF from 200 Billion Pound, GBP should weaken and a SELL GBP/USD trade should be justified. Due to the nature of this release, you need to have a newswire or audio service in order to trade it. We should see a steady market reaction after the release and possible carry over to the NY Session.

Learn this 10 minute a day Swing Trading Strategy. Get your Forex Scalping Cheatsheets. Forex News Trading is a highly profitable way of making pips if you know how to trade the news correctly. You make money from the volatility in the forex market. When some news of fundamental importance is released to the market, the market reacts in a nervous and jittery manner. Many traders look for this type of volatility in the market to make a killing.

But many traders get themselves killed by the market instead. So only trade news if you are experienced and know how to do it. The markets are highly volatile at the time of news release. Most traders prefer to stay out of the market at those times. You never know how the market is going to react to a surprise news so many professional traders will advise you to keep yourself away from the market at those times. By closing all your open trades before the release of the news you make yourself safe.

Then why do some traders try to jump into the market at such times. The reason is if you know how to trade the news correctly, you can sometimes make hundreds of pips in minutes. This type of windfall gains lure this mavericks into trading the news when everyone wants to hold the breadth.

An important question that comes to your mind is what type of news makes the market nervous. Anything that is unexpected is going to make the markets nervous. Suppose the market is expecting a certain housing sales figures but when the housing sales figures are released, they are unexpected! This will make the market nervous. The prices will suddenly start shooting up and down without any reason. It takes sometime for the market to understand the importance of the news and settle down. This time may be a few minutes to a few hours.

What you need to do is take a look at the monthly economic news release calender and mark the times when news of fundamental nature like the Non Farmpayroll (NFP) figures, GDP figures, Consumer Confidence figures, sudden interest rate changes by the Central Banks, CPI figures and so on are released. Just Google Economic News Release and you will find this information for US, Canada, EU etc.

Just observe how much volatile the market becomes at these times by trading on your demo account. The liquidity in the market thins out, the spreads widen and it becomes really difficult not to get your stops tripped. If you are risk averse then you need to stay away from the market at such times.

For those risk takers who want to make tons of pips in such times, news trading is a great opportunity. Within a matter of few minutes you can make up to a hundred pips easily if you are trading at the right time! The most market moving report is the NFP report!