Live-On-The-News Forex Trading

Why Forex Live-on-the-News
is the safest and easiest way to
make money as a trader...

Would you like to know the safest and easiest way to make money as a trader of Forex ... and why no one wants you to know about it?

Follow along and I will explain: First, let's look at one of the many news releases that come out each month ... and see for ourselves if we can consistently predict market movement based on the numbers.

There are many news releases that can be traded. However, in this article I will focus on the Canadian Employment figure, which is released once a month.

The Canadian Employment Report measures the number of new jobs created in the previous month. This report has a great impact on the markets, as it affects consumer spending. The more people with jobs, the more people who are putting money back into the economy through retail sales, and so on.

Because this number is released early in the month, analysts have very little time to gather information, and many times the number published is way off the expected number. This causes a shock when the actual number is released. This shock is what allows us to enter a trade with a very high probability of success.

In November of 2008 the expected number was -10k new jobs. This means that the analysts from all over the world came to the conclusion that there had been a decrease of 10k jobs in the past month.

As explained earlier this would be good for the Canadian economy and currency. If the Canadian currency strengthens then the US dollar will fall against it - meaning that the USD/CAD currency pair will go down.

The market has adjusted over time to the consensus and is awaiting the actual release from the last month. When the actual number is released there is a shock factor involved; if it is substantially different to what the analysts had expected then the market will react.

Again, a higher than expected number would increase the strength of the currency against the dollar, causing an immediate fall on the USD/CAD pair. If the number is substantially lower than expected, you would expect to see the pair go up.

Take a look at the chart below. The actual number released in July was 19.5k, which is substantially higher than the -10k jobs expected.

This higher than expected number created a rush in the market almost immediately and as you can see the market was sold off almost 40 pips. As you can see the concept is pretty cut and dry once you understand the basics.

For October of 2008, the analysts had published the expected number at 10k jobs which would signify an decrease from the previous month.

Keep in mind that we are not too concerned about how this month's number compares to last month's number. We are only concerned with how this month's actual number compares to what the analysts have estimated it should be.

In this case the actual number came out at 106.9k instead of the expected 10k, which means this release was greater than expected and which would have strengthened the Canadian economy and currency. Therefore the US dollar would have gone down against the CAD.

You have just seen two examples in which the actual number released was higher than the expected number. There is consistency in this type of trading as both times the released numbers were higher then expected and the market moved down quite nicely.

In this case, if you had entered upon the release of the data you could have picked up potentially over 70 pips in a matter of minutes. All charts in this article are 1-minute candlestick charts. Looking at the 7am candle, you can see when the data is released that the market moved approximately 70 pips within 5 minutes. In fact it moved over 40 pips in the first 60 seconds of the move.

There are many trading systems out there but unfortunately most of them are gimmicks. Trading the news is a very simple concept.

Lets look at August 2008. It was expected that there were 5k jobs added in the prior month. When the actual number was released it was well under at -55.2k jobs. This time, the analysts were too high in their expected number. As you can see in the chart below the market moved up just as would be expected.

If you were watching the release at 7am Eastern and heard the numbers you could have entered long and picked up around 50 pips. This really is a very basic concept that works surprisingly well.

What happens if the release comes out close to the expected number, meaning the analysts did a good job?

If you have watched the market around news times you have probably noticed that at times it seems to have a mind of its own. First it flies up, then down, then just moves sideways. This is generally the result of a release that does not deviate from its expected number.

When this occurs you will generally see a whipsaw type market and it is a good idea to steer clear of these trades.

In September of 2008 the data was expected to be released at 10k new jobs and the actual release showed an increase of 15.2k new jobs. Now this is obviously a higher number, which technically would give a sell bias.

However there is very little difference and therefore this would be a dangerous trade to enter.

As you can see in the chart below the market did spike up on the 7am candle. However, it quickly moved back down and had you entered you probably would have lost a few pips as you would not have been able to get out of the trade in time.

When the market comes out close to the expectation, by all means STAY OUT!! There will always be another trade.

For January 2008 let's imagine you are in a real trade. Let's pretend that we are in front of our computer and it is 6:59 am Eastern. T-minus 60 seconds. We have our dealing station up and the actual number will come out any second now.

The expected number is 15k and we get the actual number and find that it is -18.7k. That is approximately 33k less jobs than expected.

We already know that if the actual number is lower than expected we buy. With that in mind let's take a look at the chart below and see how we did.

In the last 5 examples we have gotten 4 signals to trade, for potentially 200 pips profit. Keep in mind the examples I am using are actual release data and market movement so these are not hypothetical moves. They are historical fact.

For June of 2008 the analysts published an expectation of 10k and the actual release number came out very close to the expected at 8.4k.

This would give a long bias as the actual number is lower than the expected. However, for the use of trading it is very close to the expected.

I have a rule that I use on this particular release that says it has to deviate by more than 15k more to be a trade. As it didn't meet the criteria, this is a "no trade".

For February of 2008 and the expected number was 10k. The actual number came out at 46.6k, which was a huge shock, as it deviated by over 35k.

As you can imagine, this piece of data affected the market substantially. True to form, just as in the past when the release comes out higher than expected the USD/CAD pair falls immediately and substantially, given the deviation.

This brings our total to 7 possible trades, of which we consider 5 tradable, resulting in a possible 250 pips movement.

If a currency is getting stronger, then it will move the market accordingly and there is no guess work involved - unlike with technical analysis, for example.

The final release we will look at is the March of 2008 - the expected number was 3k.

This was a great trade and we made substantial profits on this and many of the other releases. And just to be clear, I personaly make a living trading the news LIVE... as do many other traders. ...and you can do it too.

Pretend one more time that you are trading this live. You have the following criteria in front of you. The expected number is 3k. If the actual number comes out higher by 15k or more sell and if it comes out lower by 15k or more then buy. That is it. The released number is 43.3 what do you do?

The above image is a 1 minute chart showing another possible profit of 50+ pips.

So how did you do? This last trade moved over 70 pips. Combined out of 8 releases, we saw a total of 6 trades resulting in over 350 pips profit. Keep in mind there are dozens of releases that you can trade each month and they all work on the same principles with slight variations.

Can this be possible? Is it realistic to assume there is
a cut and dry way to trade Forex?

You might be asking yourself... If this works so well than why haven't I heard about this? And why does everyone tell me to stay away from news trading and concentrate on technical trading?

For one, brokers are in the business to make money. 97% of all Forex traders fail and brokers know this. Technical trading is going to accomplish 2 things. First it will have you trading multiple times a day, which creates revenue for them based on transaction fees. And secondly, most brokers are holding your position in house, which means if you lose they keep the money. Being that 97% of technical traders fail, it is a win-win for the broker.

How about training companies, why would they suggest you technical trade and hide such a powerful trading secret?

Most companies not only train you, but they will refer you to a broker and collect the same transaction fees that the broker does after each time you trade. In addition it is very easy to create gimmicky type products based on proprietary indicators, and so on.

One reason something as cut and dry as the trading the news isn't marketed by training companies is IT'S TOO SIMPLE. There is no big secret and no big course to sell for a big price. But simplicity is powerful... Trading the news truly is cut and dry and void of guessing, and thus exceedingly powerful and profitable.

* Please remember trading currencies is very risky and you may lose all or some of your investments.

* Past Results Performance Disclosure: Past results are not necessarily indicative of future results.

* General Risk Disclaimer: All Trading involves risk. Leveraged trading has large potential rewards, but also large potential risk. Be aware and accept this risk before trading. Never trade with money you cannot afford to lose. All forecasting is based on statistics derived from past performance of any trading methodology is no guarantee of future results. No "Safe" trading system has ever been divided and no one can guarantee profits or freedom from loss. No representation is being made that any account will achieve profits or losses similar to those discussed. There is no guarantee that, even with the best advice available, you will become a successful trader because not everyone has what it takes to be a successful trader. The trading strategies discussed may be unsuitable for you depending upon your specific investment objectives and financial position. You must make your own investment decisions in of your own investment objectives, risk profile, and circumstances. Use independent advisors as you believe necessary. Therefore, the information provided herein is not intended to be specific advice as to weather you should engage in a particular trading strategy or buy, sell, or hold any financial product. Margin Requirements, tax considerations, commissions, and other transaction costs may significantly affect the economic consequences of the trading strategies or transactions discussed and you should review such requirements with you own legal, tax and financial advisors. Before engaging in such trading activities you should understand the nature and extent of your rights and obligations and be aware of the risk involved. Your actions and the results of your actions in regards to any information you receive from ForexMasterMaker or any of its staff are entirely your own responsibility. ForexMasterMaker or any of its staff can not and will not assume liability for any losses that may be incurred by the use of any information received from ForexMasterMaker or its staff. Any such liability is hereby expressly disclaimed.

* Hypothetical Disclaimer: All results are considered to be hypothetical unless otherwise specified: Hypothetical performance results have many inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under or over compensated for the impact, if any, of certain market factors, such as lack of liquidity. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. Furthermore, only risk capital should be used for leveraged trading due to the high loss involved. One of the limitations hypothetical performance results is that they are generally [prepared with he benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical
trading record can completely account for the impact of financial risk in actual trading. For example the ability to withstand losses (and incur account draw downs) or to adhere to a particular trading program in spit of trading loses are important issues which can also adversely affect actual trading results. There are numerous other factors related to the market in general or to the implementation of any specific trading program, method or system, which cannot be completely taken into consideration with hypothetical performance results and will affect trading results and your
P/L.

* Testimonials: Unique experiences and past performances do not guarantee future results. Testimonials herein are unsolicited and are non-representative of all clients; certain accounts may have worse performance than that indicated. Trading spot currencies involves substantial risk and there is always the potential for loss. Your trading results may vary. Because the risk factor is high in the foreign exchange market trading, only genuine ?risk? funds should be used in such trading. If you do not have the extra capital that you can afford to lose, you should not trade in the foreign exchange market. No ?safe? trading system has ever been devised, and no one can guarantee profits or freedom from loss.