Tight fixed spreads with no transaction fee. While the pin bar can be traded on the daily or 4 hour time frame, the inside bar is best traded only on the daily time frame. As a price action trader, you have a distinct advantage over other market participants using something other than price action. Would you have any reason for this?? This is why the inside bar setup is often referred to as a type of breakout strategy.
How much time is needed between putting on a new position and a scheduled news event that could adversely affect that position? This of course can change depending on the last two factors listed above. This scenario involves an open position that is in profit, but stands a good chance of turning negative if the news event in question adversely affects the position.
Should you close the trade and book a small profit to be safe? But then what if the market moves in favor of your position? If you close it now you risk missing out on potential profits.
Your number one job as a trader is capital preservation. Making money always comes second. I can always get back in later if the market presents a favorable opportunity.
When a high impact news event is around the corner and you have a position that is well into profit, you have more options. One thing that can influence your decision here is how far away your trade is from its profit target. In this case I would be more likely to close the trade before the news event to book profits. Your other options are to take a partial profit and leave the remaining position on or keep the entire position open throughout the event.
But one thing is certain, you have a lot more options with a position that has run into considerable profit. By now you should know how to configure your Forex Factory calendar as well as how to manage news events. I have written before about how to use the news to gauge market sentiment. However this time I want to talk about actually reading the news through the price action strategies that form on your chart. What is a pin bar, really? How about an inside bar? Whether it be something that was just announced or a more gradual flow of news that causes market sentiment to either fluctuate or remain constant.
In fact all Forex trading strategies are a byproduct of news in one way or another. However the pin bar and inside bar really embody the essence of how news can influence a market. Some of the best pin bars form on the back of a major news event. In fact one of my favorite setups is the NFP pin bar.
This is because NFPs are released at 8: The timing of a news event like this can often cause the price for US Dollar pairs to rise or fall quickly, thus forming a 4 hour pin bar.
The inside bar can be thought of as the opposite to the pin bar. While the pin bar represents a volatile push in either direction, the inside bar represents consolidation after a large move. So whereas the pin bar forms as news is released, the inside bar often forms the day after a news release.
This is why the inside bar setup is often referred to as a type of breakout strategy. Regardless of how or when the news occurs, the two strategies above give you a quick and easy way to read the news via your charts.
We have covered a lot of material in this tutorial. Everything from how to configure the Forex Factory calendar to how to use it when trading price action. As such I would like to summarize some of the more important points to keep in mind when using the news calendar. First and foremost, the news calendar should never be used as a tool to help you enter the market. In other words, attempting to trade a news event for the volatility it causes is a surefire way to blow up a trading account.
The calendar can, however, be a great way to keep track of upcoming events. As a price action trader, you have a distinct advantage over other market participants using something other than price action. You have the ability to read the news through your charts using strategies such as the pin bar and inside bar. Just remember to stick to the daily and 4 hour time frames with the exception of the inside bar, which should only be traded on the daily time frame.
It breaks down how to use the calendar in 5 simple steps and explains which news events produce the most volatility. Brilliant course, really helps to understand trading a lot better. I wrote a separate lesson regarding how to use the news to gauge market sentiment.
Here is that lesson: Thank you for the kind words. I have been using Forex Factory Calendar for several months now, but your article has given me lots of tips and insights how to use it more productively.
Hi Justin, came across this accidentally, but so glad I did. Very informative and will certainly help me a lot in the future. Have been a FF subscriber for some years, and have never really tried to look at it in depth, ie past the main items I was interested in using.
Thanks again Justin, keep up the good work please? Hi I want to registry and be a member of Forex Factory. However I cannot do so because it kept asking me for my human verification. I cannot see any wording on the human verification box and was not able to proceed with the registration. I just realised i v e been getting some crucial thing about trading so wrong after reading through your site.
So,it is very useful lesson. No minimum deposit or obligation to trade. All-in-one browser interface that parallels any desktop platforms. Trade anywhere, anytime with our mobile app. Develop trading strategies with our powerful charting tool.
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