Lesson 3

News Scalping Strategy

FX M1

By Adam Khoo
adam@akltg.com

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2017
 FX: News Scalping Strategy
• The FX News Scalp strategy is a Scalping strategy that takes advantage of rapid
and large price movements driven by major market moving news in a currency
pair
• M1 (One minute candles) are used.
• The strategy is to concurrently place a long and a short order exactly 3 minutes
before the impending news release
• We expect the news to move the currency pair in one direction, trigger the long
order if it goes up or trigger the short order if it goes down
• The winning position is exited precisely 60 seconds after the news release.
• Average R Win : 1.5R-5R
• Average R Loss 0.5R-2R
• Win Rate: 50%-60%
 FX: Scalping the News
Important Points
• Only trade this strategy with stable internet connection
• We only trade 5 major news announcements (RED flag) with specific data
• Non Farm Payrolls (NFP)
• CPI (Consumer Price Index)
• GDP Data
• Unemployment Claims
• Interest Rates www.forexfactory.com Time synced to
traders local time

GDP+ unemployment rate on CAD

 FX: Scalping the News
Important Points
• We only trade major news announcements (RED flag) on major currencies
• USD News -> Trade EUR/JPY/CAD USD, GBP News -> Trade GBP USD,
• CAD News -> Trade USD CAD, JPY News -> Trade USD JPY
• EUR News -> Trade EUR USD, CHF News -> Trade USD CHF
• NZD News -> Trade NZD USD, AUD News -> Trade AUDUSD

Time synced to
www.forexfactory.com
traders local time

GDP+ unemployment rate on CAD, we trade USD CAD

 FX: Scalping the News
Important Points
• Only use Forex Brokers with very tight spreads 1-2 pips that use an MT4
platform that allows placing 2 opposing orders on the same currency pair
• Reliable Internet connection
• I use www.halifax.com.au MT4 Platform (Non US Citizens)
• US clients have to use a US regulated broker that have these features:
forex.com, oanda.com
www.forexfactory.com Time synced to
traders local time

GDP+ unemployment rate on CAD, we trade USD CAD

 FX: Scalping the News
Entry and Exit Rules
• Entry orders and stop losses are placed exactly 3 minutes before news is
announced
• Long Position
• Long Entry 1: Buy Stop Order 12 pips above current market price
• Stop loss 1: Sell Stop Order at current market price
• Short Position
• Sell Entry 2: Sell Stop Order 12 pips below current market price
• Stop loss 2: Buy Stop Order at current market price
• Note: For GBPUSD, the distance used is 16 pips

Long Entry: Buy Stop Order 1.2862

1R =12 pips market
Long Stop Loss: Sell Stop Order 1.2850 price
1.2850 at 3
Short Stop Loss: Buy Stop Order 1.2850
mins before
1R =12 pips news
Short Entry: Sell Stop Order 1.2838
 FX: Scalping the News
Entry and Exit Rules

• Scenario 1 (Long Entry Triggered)

• Price moves up and triggers long entry order once news is released (within 10
seconds)
• Cancel short entry order immediately
• Exit Long Trade after 60 seconds (news 1 minute candle closes). Exit by shifting
stop loss order to latest market price.
• Outcome can be -1.5R loss to unlimited R gains (usually 2R to 10R is possible)

Long Entry: Buy Stop Order 1.2862

1R =12 pips market
Long Stop Loss: Sell Stop Order 1.2850 price
1.2850 at 3
Short Stop Loss: Buy Stop Order 1.2850
mins before
1R =12 pips news
Short Entry: Sell Stop Order 1.2838
 FX: Scalping the News
Entry and Exit Rules
• Scenario 2 (Short Entry Triggered)
• Price moves down and triggers short entry order once news is released
(within 10 seconds)
• Cancel long entry order immediately
• Exit short Trade after 60 seconds (news 1 minute candle closes). Exit by
shifting stop loss order to latest market price.
• Outcome can be -1.5R loss to unlimited R gains (usually 2R to 10R is
possible)

Long Entry: Buy Stop Order 1.2862

1R =12 pips market
Long Stop Loss: Sell Stop Order 1.2850 price
1.2850 at 3
Short Stop Loss: Buy Stop Order 1.2850
mins before
1R =12 pips news
Short Entry: Sell Stop Order 1.2838
 FX: Scalping the News
Entry and Exit Rules

• Scenario 3 (Neither Orders Triggered within 10 seconds)

• Upon release of the news, the price does not move enough to trigger the long
order or the short order within 10 seconds
• In this case, we cancel both long and short orders immediately.

• Scenario 4 (unlikely but possible)

• It is possible that currency pairs moves rapidly in one direction and then the
opposite, triggering both long and short positions and hitting both stop
losses, resulting in a -2R or -3R outcome

Long Entry: Buy Stop Order 1.2862

1R =12 pips market
Long Stop Loss: Sell Stop Order 1.2850 price
1.2850 at 3
Short Stop Loss: Buy Stop Order 1.2850
mins before
1R =12 pips news
Short Entry: Sell Stop Order 1.2838
 FX: Scalping the News
Important Notes

• When price moves quickly during news announcements, your long or short
entry order may not get filled at the intended stop price
• Example: Your buy stop order may get filled 1-12 pips above the intended stop
price, resulting in a 1.5R-2R risk or more.
• If your order is filled far away from your intended entry price, you can
immediately shift your stop loss to within 12-16 pips of the entry price to keep
your risk at 1R!
 9.29
Minute candle USD CAD Scalp 1 Dec 9.28
9.30 news
Long Entry 1: Buy stop 1.2892

1R=12 pips
SL 1: Sell stop 1.2880
Price at 9.27pm 1.2880 SL 2: Buy stop 1.2880
1R= 12 pips
Short Entry 2: Sell stop 1.2868
Short trade
triggered

9.27
Orders placed Profit
= 58 pips (4.8R)

Short trade
Exit after
Major news at 9.30pm 1min candle
closes
 USD CAD Scalp 21 Dec
Minute candle

8.27 (Order placed)

1R=12 pips 8.30 news
Long Entry 1: Buy stop 1.2812
1R= 12 pips
SL 1: Sell stop 1.28000
Price at 8.27pm 1.2800
SL 2: Buy stop 1.2800
Short Entry 2: Sell stop 1.2788
Short trade triggered
@1.2786

Profit
= 48 pips (3.42R)

Short trade Exit

1.2738 after 1min
Major news at 8.30pm candle closes
Minute candle USD CAD Scalp 22 Dec

Long trade
Exit after 1min
candle closes
@1.2775

Profit
= 46 pips (1.9R)
Major news at 8.30pm
long trade
triggered &
filled 1.2729
8.27
Orders placed
Long Entry 1: Buy stop 1.2717
1R=12 pips
SL 1: Sell stop 1.2705
SL 2: Buy stop 1.2705
Price at 8.27pm 1.2705
1R= 12 pips
Short Entry 2: Sell stop 1.2695
8.30 news
 6 Dec
USD CAD Example
4.8R+

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2017
 7 Dec
EUR USD Example
0R

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2017
 8 Dec
EUR USD Example
0R

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2017
 22 Dec
USD CAD Example
3.75R+

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2017
 17 Jan
USD CAD Example
0R+

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2017
 Lesson 3
News Scalping Strategy
FX M1

By Adam Khoo
adam@akltg.com

Copyright ©
Adam Khoo Learning Technologies Group Pte Ltd 2017