HOW TO PROFITABLY TRADE THE NEWS CONSISTENTLY - forex cobra trading system

HOW TO PROFITABLY TRADE THE NEWS CONSISTENTLY ~ forex cobra trading system

Anyone thats ever traded the forex is aware of the impact news might have on the marketplace. In only a few seconds, the markets can move hundreds of pips can move. In case your money is in the right path, this can bring about bringing in 50%, 25%, 10%, or more. But if youre trading against the marketplace, youll be able to have your account wiped out right away.
Here is some basic tips that may assist you to understand the forex news only a little better.
Every country has certain economic reports that will significantly impact their currency. This is a listing of 3 of the most powerful economic releases in the United States:
1. Employment growth
2. Interest rates                                                                                     3. Trade balance

Every country has a listing of the economic reports. They can be scheduled weeks and even months beforehand, so you can be completely ready to trade each of the reports.
For all the releases that are economic, before they are released, economists try to predict the results of these reports. When the results are drastically different from the predictions, the greatest movements in the forex will occur. Thankfully, the predictions by these economists may also be open to all.
Occasionally the marketplace can offer you a hint to the way in which the news will turn out. If the market is really quiet (i.e. the price doesnt move much) hours and minutes leading up to the economical release, then you can be rather certain that the resultant move will be fairly dramatic.

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Even more on news driven trading - forex trading swing strategy

Even more on news driven trading ~ forex trading swing strategy

News driven trading is even more in vogue today than when I last mentioned it, judging from the increasing number of vendors (e.g. Ravenpack, Sensobeat, Recorded Future, etc.) and researchers pitching their wares. Not only are traditional financial and economic news deemed important, but researchers have found even blog posts (at least those on Seeking Alpha) and Twitter (Hat tip: Satya and William) to be predictive of stock prices.

One key ingredient to success in this type of trading is of course the ability to gain access to breaking news ahead of other traders. On the macroeconomic news front, the MIT Billion Prices project has spun off a company called PriceStats to deliver daily consumer product price index to subscribers. PriceStats compiles this index by continuously scanning online retailers websites, and hopefully provides a preview of the official CPI numbers. Whether this is useful for futures and currencies traders is of course subject to their rigorous backtests, though the chart displayed on their website does suggest that the daily price index is a leading indicator of the CPI.

There is an important caveat to using news trading: not all news are equal. So another key ingredient to success is to carefully differentiate between the different types of news and backtest their predictive abilities separately. For example, I recall some research has indicated that an analyst downgrade of a stock from a "hold" to a "sell" rating has more impact than from "buy" to "hold" rating.

My own experience with news driven trading is that for all this trouble, the trading opportunities are relatively few compared to pure price driven trading, the consistency of success is low, and finally the profitability lifespan is short. If you have better experience, do share it with us.
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