Is this technique viable?

Waiting for the Core PCE Price Index m/m i am planning on watching the dollar/GBP chart tick by tick and catching the momentum (whether it be up or down) as it happens. I would have the trade ready to open with my broker so it could be executed pretty much instantly, but would it be possible to catch the momemtum as it happens?

PS. Being new to forex (day trader by trade) could i assume that the impact of this data would have an effect on the dollar/GBP?

Many thanks

but these guys do. Post your q there, and I'm sure you'll get more solid advice

Try it on all the major news releases for a couple months on DEMO, then see for yourself how it works. You'll figure it out pretty quickly, I'm sure.

Trading the news can be profitable and it also can be a killer. Here are a couple of things to consider when trading the news:

1) the momentum of price can depend on the difference b/ expected and actual
2) when multiple data is released at the same time price can whipsaw
3) on more intensely anticipated data price spreads can go very wide
4) sometimes price can gap so getting into the momentum can be harder than you might think
5) setting stops - wow, what can I say about this. this requires a little ebook to answer this question
6) sometimes entering a half hour or more before the news may be a worthwhile strategy.
7) sometimes the speculators are looking mostly for a peice of data inside a ecomonic report and not the headline number
8) some brokers purposefully slow the execution of their platform to discourage news traders
9) stradding can be done profitably but you need to have a well defined strategy that takes spreads, whipsaws, stops and take profits into account.
10) know where you want to set you take profit. this may be difference from one news event to the next
11) splitting your lots may be a way to take an initial profit and let the other trade run for larger profit
12) keep in mind that some brokers have specific rules against scalping the news.

Hope this helps. Some of my best trades have been trading the news, but you need to be prepared by reading everything you can about the data before it comes so you can get a sense of what it will do. I've lost money on the news also. Practice your strategies on demo first.


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Great post, Kudzu.

One other thing, spreads can be a form of costly entertainment.

Sometimes it will open to 20 or more pips for a millisecond or two, so if you've straddled, you can have your entry executed, then your stop hit in literally the blink of an eye.

If you've straddled too close, you might even be put into your position in the other direction as well, just before price moves against it. Yeah. Been there done that (demo only), lost both directions. When it happened, my friend was on the phone with a live account, same broker, he got hit by it too, so it wasn't just on the demo account.

Just kidding about it being entertainment, we weren't happy, especially him.