Best Trading Strategy Using Forex Factory News

How to Trade and Make Good Profit by Following Economic News
In the fast-paced world of Forex trading, economic news can cause huge price movements in just seconds. For traders who understand how to use this volatility, it creates an excellent opportunity to make consistent profits. One of the best tools to track and act on news is the Forex Factory Calendar.
i will explain how to build a profitable trading strategy using Forex Factory news, including:

1. How to use the Forex Factory calendar
2. Types of news that move the market
3. A step-by-step strategy to trade news
4. Risk management tips
5. Real examples

1. What is Forex Factory?
ForexFactory.com is a free website that provides:

1. Live economic calendar
2. Forex news and analysis
3. Forums for traders
4. Broker data

The Economic Calendar is the most valuable tool for news trading. It shows:

1. Time of the news
2. Country
3. Impact (Low/Medium/High)
4. Actual, Forecast, and Previous values

2. Why News Matters in Forex?
Forex prices are driven by supply and demand, and economic data affects how investors view a country’s economy. Some major news events can cause a currency to rise or fall sharply in minutes.
Key High-Impact News to Watch:

1. Non-Farm Payroll (NFP) – USD
2. Interest Rate Decisions – All major central banks
3. CPI (Inflation)
4. GDP Data
5. Unemployment Rate
6. Retail Sales

These are marked RED on Forex Factory, meaning High Impact.

3. Best Strategy: Trading News with a Plan

Step-by-Step News Trading Strategy:

Step 1: Check the Calendar
Go to forexfactory.com/calendar
Set your local time zone and filter High Impact news only.

Step 2: Choose the News
Focus on high-impact events like:

1. USD: NFP, Fed Rates
2. EUR: ECB press conferences
3. GBP: BOE Rates, Inflation
4. JPY: BOJ Rates
   Avoid low-impact news for serious trading.

Step 3: Pre-News Setup

1. 15–30 minutes before the news, open your charts (e.g., EUR/USD, GBP/USD, USD/JPY).
2. Draw support and resistance levels on M15 or H1.
3. Watch for price consolidation before the news.

Step 4: Trade the Spike (2 Methods)

Method 1: Breakout Strategy

1. Wait for the news to release.
2. If the price breaks above resistance, enter a BUY.
3. If it breaks below support, enter a SELL.
4. Place tight SL and trail the stop to lock in profit.

Method 2: Wait-and-Trade Strategy

1. Wait 5–15 minutes after the news spike.
2. Let the market settle.
3. Enter in the direction of the strong move, with confirmation from candlestick patterns (e.g., engulfing, strong momentum candle).

Step 5: Manage Your Risk

1. Don’t overleverage.
2. Use stop-loss always.
3. Risk only 1-2% of your account per trade.
4. Avoid trading during major uncertainty (e.g., elections, war headlines).

4. Example: NFP News Trade on EUR/USD

1. News: Non-Farm Payroll
2. Forecast: 200K | Actual: 120K → Bad for USD
3. EUR/USD jumped 80 pips in 10 minutes.
4. Strategy: Buy breakout above key resistance 1.0900
5. SL: 20 pips | TP: 60 pips (1:3 risk-to-reward)
6. Result: +60 pips in under 1 hour

5. Tips for Success

1. Avoid overtrading. Not every news is worth trading.
2. Use demo account to practice this strategy.
3. Combine with technical indicators like RSI, Moving Average for extra confirmation.
4. Always check for multiple news events that may conflict.
5. Don’t trade during low liquidity sessions.

Alternatively, you could act like an actual professional and subscribe to Reuters, Bloomberg, AlphaFlash, Selerity, Markit, etc. Then hire a programmer to create a news feed aggregator which channels all of these digital news providers' feeds into your software to provide you the fastest possible delivery. This software would be linked internally to your FIX API app that is hosted (via cross connect) on dedicated servers and allow you to trade the news AS IT HAPPENS at multiple high class brokers, using multiple currency pairs, simultaneously. Armed with a meticulously kept database of prior deviations for all the various countries' news reports, as well as the resultant size of the moves, you'd be well prepared to know which triggers to use from which to base your trading decisions. Using limit orders and slippage control, already set in advance of the news coming out within the software, you would then be able to auto-capture a good chunk of the initial market spikes and be done and dusted within seconds.

Of course the only reason I'm telling you all of this is that even this strategy - which made fortunes for the past twenty years - isn't as lucrative as it once was.

Good luck with that support/resistance and wait-&-trade stuff though.

Thanks for the detailed insight! You're absolutely right—institutions and HFT firms with premium data feeds and infrastructure have a huge advantage. But for retail traders without access to such resources, simpler strategies like support/resistance and wait-and-trade are still practical and achievable ways to profit, especially when used with discipline and risk management. Appreciate the perspective!

A history lesson:

Perhaps you're too young or simply weren't around at the time, but years ago there were several services that provided proxy access to the aforementioned digital data providers at rates retail traders could afford.

Around late 2004/early 2005, there was a guy call Tom Yeomans (http://web.archive.org/web/200512261...rexfusion.com/) who essentially publicised news trading to the retail forex community. He in turn had been mentored by a New York bank trader by the name of Jimmy Young. At that time Tom had a small chatroom in which he listened to an audio squawk service and relayed it to us verbally, his small group of students, and we were able to MANUALLY capture parts of the initial market moves, just by following his instructions. He'd say things like, "ok folks, UK CPI is up 0.2%.... umm... that's a buy on GBP/USD." Remarkably we were actually able to make money - albeit for a very short period - using this method.

Unfortunately, there was another member of the group called Dmitri Chavkerov, who went by the pseudonym, 'Felix Homogratus'. Dmitri was the founder of the Forexbastards website, later rebranded under the more family friendly title of Forexpeacearmy, and he was not content with small-time gains. Through his platform and from cajoling Tom, the two became business partners and they opened up news trading to a much larger audience, almost over night. With all these new people clamouring for a piece of the action, it became readily apparent that listening to someone else, pondering over the ramifications of the news and only then making a trading decision, was not going to cut it.

Another, more upstanding, member of Tom's group was a programmer by the name of Safwan Hak. He realised that in order to have an advantage over the masses, it was going to require having access to faster, digital news. He created - and later hired out - 'The Forex Muse' (http://web.archive.org/web/200701081...forexmuse.com/), which allowed retail traders to be able to access fast news AND have an application that allowed the trader to set their buy/sell triggers, which if hit, would enter a trade with rapidity on the trader's brokerage platform of choice. This was achieved by way of a quaint 'point and click' method, whereby the trader would click on the buy or sell button from within the Forex Muse, then click on the corresponding co-ordinates of the buy and sell buttons on market order window of MT4 or whatever platform was being used. It was then a case of wait and hold your breath. The news would come out and if the trigger was hit, the software would instantly buy or sell accordingly. Brokers didn't know what had hit them and a lot of easy money was made.

Of course, Dmitri was also privy to the discussions that Safwan, Tom, and the rest of the original group members were having. He in turn hired a programmer to create his (forex)bastardised version, known as 'The Secret News Weapon': http://web.archive.org/web/200702251...ewsweapon.com/

Another, Dmitri-esque, chancer by the name of Dustin Pass came along shortly thereafter and provided a third alternative resource known initially as the 'RSS' (Rapid Signal Service), then later rebranded as 'Oracle Trader' (http://web.archive.org/web/201007300...cletrader.net/)

So for years there were a few competing services out there that allowed retail traders access to premiere news and the software with which to capitalise from it. As with everything else in the trading world that makes money, the more people that know, the less profitable it becomes. The pie is finite, the mouths are not.

Safwan and the rest upped the ante and provided even higher level services, but for many they were cost prohibitive. It was at this stage that the die hards started using some of their profits to have FIX API (Financial Information Exchange Application Programming Interface) software built. Using this we were able to ditch piddly little MT4 brokers and trade on higher grade platforms, such as Currenex, Integral, Hotspot, etc. It also meant we were able to stop the 'point and click' crap and have all the trading decisions handled internally within the software itself.

The liquidity providers were not happy, which naturally meant that we had to try and hide our 'toxic flow' from the brokers as best we could, by means of trying to disguise our news trading activities by placing other, non-news, trades. Such endeavours didn't really work of course, because it doesn't take much to spot the 40 million notional volume being traded amongst all the 0.01 microlots.

So, the problem for years was simply one of finding good, new brokers, making as much as humanly possible before getting your account flagged, then moving onto the next one, while hoping the previous one(s) honoured the profit withdrawals.

All of this worked like a charm until the world went mad in 2020. Since that time, everything has become MUCH more difficult. Thankfully I'm somewhat of an old(er) fart and have made my money already.

For you (presumably) younger folk, I would still suggest utilising news as a catalyst for trades. Keep a record of all the past deviations and see what constitutes a LARGE deviation. In case you don't know what I mean, I am referring to the difference between the FORECAST and the ACTUAL. Also, ForexFactory only displays the median number for the forecast. Use your brains and try to find the full range of estimates. That way you'll know when/if the actual number is completely outside of the range. If it's outside then it's a surprise and markets react to surprises...

Wow—thank you for the rich historical context and detailed breakdown of how retail news trading evolved over the years. It's fascinating to hear about the early pioneers like Tom Yeomans, Safwan Hak, and how tools like Forex Muse and Oracle Trader paved the way for semi-institutional setups for retail traders. I genuinely appreciate you taking the time to share this timeline—there’s a lot of wisdom here that newer traders wouldn’t know unless someone like you documented it. While the edge from those earlier systems may have faded, your point about still using news as a catalyst and tracking deviations is spot on. Surprises still move the markets. The game has changed, but the core principles of speed, context, and execution remain. Thanks again—this was both educational and inspiring.

Awesome posts, thanks a lot for the insights.

PC

So true.. I was on that ride too.

Is there any news provider now? Or all gone?

But your method is very firm with exact price to buy/sell. You do not need to have HFT programs to trade it. A very simple expert can make that trading. AND things often happen so fast, that you cannot make it fast enough by manual trading. The expert is fast and exact.


(Hej til Vikingerne her i tråden)

Great breakdown! News trading is powerful if you’re prepared. Love how you highlighted the breakout and wait-and-trade strategies. Let me insist Risk management is key!

A couple of the very big players from yesteryear are still providing access, but you need to be in the know with them. They're very hush hush about it and you need to be trading big volume to even be considered.

The only guy I know who still provides a somewhat regular commercial service is James Dennis, over at: https://tradewithgalaxy.com/

Before you get too excited, his service is one where HE does the trading and you pay a commission on any profits made. It's also still geared towards MT4 trading, which means no slippage control and a 'hope and pray' model that the market has continuation after the news spike, because order fills are usually at the end of it. If there is an immediate retracement then you're busted.