(Recommended timeframes M1)
This article will describe a simple but effective strategy based on the most important macro-economic news. For this strategy we will use pending orders Buy Stop and Sell Stop, where Stop Loss will be placed at the short distance from the opening price level, while Take Profit - at the long distance from the opening price; or orders can be closed manually.
The key factor of placing an order is the choice of the news, which will cause the strongest momentum in the market. The most important news are subdivided into the following information groups:
Non-farmPayrolls
Industrial Production
PPI
GDP
CPI
Unemployment
Consumer Confidence
Money Supply
Harmonized Index Customer Price (UK and Europe)
Trade Balance
Retail Sales
Current Account
Tankan
ISM (USA), PMI (Eurozone), CIPS (UK)
Michigan Sentiment Index
Beige Book
Chicago PMI Index
For this strategy we can choose those major pairs, for which the news will have the strongest impact, triggering the highest movement in one of these pairs: EURUSD, GBPUSD, USDJPY, AUDUSD, USDCAD and NZDUSD.
We shall compare the time in the news calendar with the time of the trade terms.
Next steps to follow: use timeframe M1 or M5.
2-3 minutes prior to the moment of issuing the news, place pending orders Buy Stop and Sell Stop at the distance of the previous high and low of the price for the last 10-15 minutes; however they should not be closer than 8 points from the current level of price. In order to minimize losses it is recommended to Stop Loss at the level of 3-4 spreads from the current price of the currency pair. It is also advisable to place Take Profit either at the level of 80-90 points or do not place it at all, but just follow the price movement.
The order will be activated at the moment of issuing the news; if the price does not reach Stop Loss, moving in the favorable direction, we shall move stop-loss in the direction of the leap.