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Nicola Delic Elliott Wave & News Trading

Elliott Wave & News Trading

In this short report, we are going to cover how to trade during most
important news events.

Fundamental Trading

It’s not a big secret that whenever we have a news event, there is a
potential for a big move in the market.

But not all news moves the market same, so only news I like to follow are
these:

 Interest Rates

 Employment News

 Consumer Price Index

 Gross Domestic Product

 Retail Sales

There is probably more news to watch, but this group mentioned above
usually shows us the strongest moves.

Now, when you know what news you should keep your eye on, let’s take
a look at what currency pairs are moving the strongest during these
events.

Pairs such as EURUSD, GBPUSD, AUDUSD, USDCAD , USDJPY, USDCHF


usually reacts best during high impact news, and as you can see they are
all pairs from the major group. So that’s the group to follow when there
are some high impact news coming.

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Nicola Delic Elliott Wave & News Trading

How To Prepare Yourself For News Trading

Trading news is not so hard, but still there are few steps you need to
follow carefully:

Step 1) Find The News


Step 2) Check The Previous News Impact
Step 3) Do Your Wave Counts
Step 4) Prepare Your Risk Plan
Step 5) Trade
Now let’s go east over each step …

Step 1 - Find The News

Just as the name of this step tells you, finding news is the step where we
need to go and find what economic events are coming up and when to
expect them…

Every weekend, go and visit economic calendar that you like most, my
preferred is fxstreet (www.fxstreet.com/economic-calendar) and see if
there is any high impact news coming.

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Nicola Delic Elliott Wave & News Trading

Write down all high impact news that you find in your notepad and also
put a reminder on your phone, so you don’t forget to watch the results
later.

Quick Tip: Most news calendars out there label high impact news red, so
try to filter your news for faster completing this step.

Step 2 - Check The Previous News Impacts

This second step can be hard in the beginning, but after a few tries it will
become fun and after a while it’s going to come natural and easy.

Since we know that market is just repeating itself over and over again, we
are going to try to check how market reacted in history during the news
that is coming just to get feeling what you can expect to see.

Every calendar has history of economic events, go and find what dates
you had news that you want to trade and find last 3-6 dates.

After you picked up dates, go and open a blank chart on 1-hour or 30-min
time frame and try to scroll down in history on dates when you had your
news.

Tip: Save charts in one place, so you don’t need to repeat this step every
time you have the same news.

Now try to see current market move and try to see if there is some
similarities between history and current move. In case you have any
similarities, you can go and use it as your trading map.

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Nicola Delic Elliott Wave & News Trading

Do Your Wave Counts

This third step should be simple for you. By now, you should have already
done 100 wave counts on your own, so try to go and find the wave count
for the currency pair you want to trade during the news.

Try to start your wave counts from 1-day time frame (keep in mind that
larger trends do not disappear overnight and news will follow that trend).

Only if you can see that we are in corrective wave 2 or B on the 4H


or 1H chart you can proceed on the next step.

Trading will be the same, so you will again trade waves 3 and C with the
same game plan as regular, with just slight correction that you are going
to learn in the next step.

Prepare Your Risk Plan

Trading news can be hard due to strong and fast movements, so we need
to adjust our risk plan a little bit.

During the news, a lot of brokers are going to close trading for couple of
seconds or wider their spread (not cheating, this is normal since liquidity
drops during the news) and that’s why we are going to look to play safe.

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Nicola Delic Elliott Wave & News Trading

Instead of our usual Risk Per Trade 1% we are going to use 0.5% for our
trades (so even in case we get a bad execution we don’t over extend our
risk).

Also 5-10min before and during the news, spreads can be high and that’s
why we are going to add few pips to our stops and targets (+5 points
only), but don’t forget to go and return your stops/targets after market
returns to it's normal state (usually 10-15min after the news).

Step 5 - Trade

Trading news requires a lot of free time and good discipline. If you plan to
trade during news, be sure that you can be in front of your screens 30min
before and 1hour after the news happen.

There are two ways how you can enter a trade:

Before The News

First way to open a trade would be before the news, ideally 5min before
news release gets published, try to open a trade (market order). This
approach is great when you are ending correction, so if you can see that
we are in corrective wave C of the larger waves (2) or (B). This will
assure you to get filled from the top/bottom, but keep in mind that you
should watch the news and be ready to close the trade early if market
shows you something strong against your primary idea.

Tip: if you are close to equal legs between C=A and news are
approaching, you can enter a trade, if you are just around 50-61.8% of
C=A stay aside).

After The news

Second way of trading the news is to wait for first reaction to end, which
usually happens 15min after the news and after that try to play your
order. This approach is slightly safer, because you have seen news, you
got information what to expect next, etc.

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Nicola Delic Elliott Wave & News Trading

But before you enter a trade, you should check with your wave count if
everything is working in a direction that you wanted, plus you should
check history and see if there is some similarities between current moves
and last 3 times. Only if everything is perfect you can go and start looking
for your trades.

Tip: If history is repeating, try to see if there is a pullback coming - and if


pullback is coming, try to enter the market at that pullback, just to get a
better entry point.

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Nicola Delic Elliott Wave & News Trading

Conclusion
Trading News is powerful strategy that will help you to get fast results.

Try to practice few trades on demo account before you move to live one,
just to be sure you got everything right. Before you open a first trade, be
sure to inform yourself of what policy your broker have about trading
news so you don’t have any problem later.

This idea of trading news served me very well and I know that you will
enjoy trading it too. If you can follow the rules and these simple
guidelines you are well on your way to success as a trader.

I wish you the very best in all your trading endeavors.

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