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The FX Bootcamp Guide to Strategic and Tactical Forex Trading by Wayne McDonell

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SUMMARY

A news trade is unique. It is separate from other types of trades that take into account speed of the markets, momentum of price, and the long-term trend. It’s just a very short-term trade based on post-news volatility. You don’t marry these trades—just love ’em and leave ’em.
Many of my news trades, if not most, break even. I quickly get up 10 or 20 pips, just to have price come back and knock me out. This happens because I quickly move my stop so I take all risk off the table. Often the trade results in nothing, but several times a week I get lucky and price continues in my favor.
There are probably 10 to 15 news trade opportunities every week. Let’s say 10 of them break even and you earn zero pips. Let’s say on three others you earn only 15 pips, getting knocked out on pullbacks after you lock in MAP. Then let’s say twice you really get lucky and make 50 pips on the other two. It really does happen this way. Not every week, but many. You certainly could average daily MAP, or 75 pips per week, doing nothing but this type of trading.
However, trading this way is not likely to lead to the lifestyle or stress level you want for your career. But think of this news trading methodology this way. If you made an extra 75 pips a week on these short-term trades, they would offset one or two of your stupid trades. They could bring you closer to being a consistently profitable trader. Or at least get you to be a breakeven trader.
In any case, they could keep you trading longer ...

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