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How Forex Traders Scalp The News

Profile photo of Wayne McDonell by Wayne McDonell
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Scalping!

You have heard much about it, some of it is good, much is bad, but there are some traders that do it because:

Scalping can be done in a relatively small time frame

Scalping limits exposure to the markets adverse turns

Scalping offers more winning trades for an experienced trader

Most traders avoid being in the market around the time that an economic news report is to be released – with good reason, who can accurately predict what the market will do at the time of the report release and thereafter.

There are some traders that have studied the market reaction prior to, during and after an economic news release, and have learned that certain patterns are consistent nearly every time.

These patterns are:

10 to 20 minutes prior to a news release, the market weakens

The first minute or 2 when the news is released, the market is volatile

After the release, the market moves in favor of the currency benefited

The above market conditions do not happen all of the time, but most of the time. They happen enough that an experienced trader can depend upon the “probability” of market conditions to prevail that are favorable to a profitable “scalp”.

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