Summary: How to trade forex using an economic calendar and live news?
1). Find the baseline or ‘context’ for the currency that you want to trade;
2). Identify and know what type of news you’re waiting for to be announced;
3). Have your live audio squawk on and ready to take the trade (you’ve got all the research you need above). Then literally go on the button!
We want to show you how to uncover the highest possible probability trades on a regular basis. Now these trades almost never fail, and once you master the process, you’ll forever have the ability to make pips, and generate profitable returns.
If you’ve got any experience with trading news and fundamental analysis, you’re probably aware of the audio squawk. Now if you’re not aware, then it’s really simple. It’s a real time audio broadcast that shouts out breaking news through your PC speakers.
Take a listen below of a real example economic news release…
Exciting stuff, eh?
That’s ‘pip-making’ news right there! And right on the button, right as it happens, you are ready. This gives you the fastest reaction time possible to be in the trade ahead of everyone else and making money.
This is not just the best way to start trading forex for beginners, this is one of the best ways to trade forex, full stop! This is how professional traders routinely trade forex. Whilst everyone else is watching lagging indicators on their charts or watching their economic calendar “waiting” icon spin its wheels, you (with this professional approach) are already in the game … ahead of everyone else.
In fact, in 2016 a study revealed that over 80% of all UK investment banks use an audio squawk to keep their trading desks tuned into the markets. And the main benefit is that it only activates when something really market moving happens. So you’re not bombarded throughout the day with audio that doesn’t really matter.
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Context (or Baseline)
So, let’s drill down here and show you how you can start making money in forex news-based trading with an audio squawk.
What’s the number one, most important thing to know first?
The first thing you need to know is the baseline of why the markets are currently moving. “What is this baseline”, I hear you say?
We talk about this a lot; ‘baseline’ is something that you’re going to become extremely familiar with. Each day, we explore the ‘outlook’ of each currency pair for you – and here we talk about that all important ‘baseline’.
The baseline gives you that all important context from which to be able to truly interpret specific economic data when it’s released. In other words, to be able to KNOW what specific data will move the market and why.
Let me ask you a question: If you suddenly heard that the ECB has cut its interest rates by 1%, would you say that this was positive news or negative news?
Ah, well not so fast! Yes, on the surface this would immediately appear negative. But here now enters ‘context’ and that all important baseline.
What if the market was actually expecting the ECB to cut interest rates by 3%, not 1%?
I’ll show you what that would look like:
… and if the ECB had also announced that they saw no need to cut rates any further – well that really does then change the whole picture and cement it in concrete! Suddenly something that everyone assumed bearish and negative on the surface, actually turns out to be unexpectedly positive and bullish. You just needed to know the baseline and context
So now you understand why ‘baseline’ is vitally important, and why a single piece of economic data alone is not the whole picture.
Trading with an economic calendar and reading it properly is something that you will become very good at.
Identify What Type of News You’re Waiting For
As you’ve just seen, once you know what the market is expecting, and the context to all of those expectations, you are then able to identify what types of breaking news will most likely cause large moves in the markets.
Let’s go in for another example here to explain this:
Let’s say that you researched the US dollar and you realized that central banks (and thus the market) is really focused on inflation right now. It stands to reason that any news related to “inflation” will be market moving.
So, if you then hear breaking news about, let’s say “business confidence readings”, you know that this kind of economic news is not really going to be market moving. And that’s because everybody is focused on “inflation”.
So, identifying the type of breaking news that you’re waiting for will help you to take better trades but, it will also help you to avoid lots and lots of unnecessary losing trades as well.
Have Your Audio Squawk On And At the Ready
And so finally, then, the last simple step. You’ve done your research (and, in fact, we already did that for you inside the Terminal). So you have all the context you need and you know what type of news that you’re waiting for.
All you have to do now is listen to your audio squawk (also ready and waiting for you inside the terminal) and be at the ready. You’ll be able to react quickly, on the button, when that news breaks.
The audio squawk is the fastest way to become aware of any type of market moving news. They have teams of analysts that sit at their desk staring at hundreds of live newswires. Now all you need to do is a little bit of research (or join us inside the Terminal and have it all done for you), and be waiting at your screens with your speakers turned on when that market moving news hits the wires.
These economic news trades produce almost no draw down and move towards your profit targets very quickly. They are probably the most high probability trades that exists in the Forex market, so it’s definitely worth exploring them further if you haven’t done so already.
So there you have it, three steps for making money with an audio squawk. Here’s a quick recap for you:
1) First, you need to understand the baseline expectations for every single currency that you want to trade.
2) Next, you need to clearly identify what type of news that you’re waiting for.
3) Finally, you need to be tuned into the markets so you can trade when that news breaks the wires.
The idea for these videos came from the questions that you guys left us in the comments, so please keep those questions coming. If you find these weekly analysis and trade ideas useful, you’ll love Financial Source. Simply click the product tab on our menus above for more information