• Dairy auction news: This news directly affects NZD because New Zeland's economy is

hugely dependant on exporting milk. When there is Dairy auction macro news, you better
avoid trading the NZD.
• Industrial metals news: If there is significant and surprising news concerning industrial
metals (for example steel, copper), then you can expect to see some spike moves on the
CAD and the AUD because Canadian and Australian economies are depending on
exporting those metals. If there is an aggressive, one-sided movement on the AUD or CAD
driven by news concerning industrial metals and materials, then it is usually better to avoid
trading those currency pairs, or at least be a bit more careful.
• News concerning a trade partner economy: A good example would be strong news
affecting China's economy. When there is such a news, you can expect the AUD to react.
The reason is that China is the biggest trade partner of Australia. Australia exports to
China, and if for example, China's economy slows down, then it means less export of
industrial metals from Australia. This is bad news for the Australian economy, and the AUD
reacts strongly to such news. So whenever you see strong and surprising news concerning
China's economy, then remember to be careful with your AUD trades.

There are more correlations and links like this, but those I mentioned are the most common and
affect the forex market, in my opinion, the most.

Tip #6: Don't trade during significant news release

Apart from the fact that it is very difficult or nearly impossible to predict price movement during
the news release, also the market conditions are usually against you during significant
macroeconomic events. Even if you had a working macro news based strategy, your strike rate
would be severely diminished by wide spreads, lack of market liquidity, and slippage. Those are
quite common and tightly linked to news releases. It is pretty hard to trade the news when you
will often have your stop loss slipped by multiple pips or when your spread widens from the usual
0.5 to 5 pips. Such conditions literary kill any profitable day trading strategy. So also, for this
reason, I decided to stay away from trading the news.

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BONUS TIP: If I am trading using limit orders (this is around 50% of all the cases) then I simply
lower my position size to the minimal size. This way I don't need to withdraw my limit orders.
Worst case scenario - my trading level gets hit, and I lose few cents or a dollar. I switch back to
my standard volume size after the macro event has passed. I do this simply to save time because
setting new limit orders all the time becomes a bit tedious after some time. I do this with my
broker which uses cTrader platform. I am not sure if this is also possible to do with the standard
MetaTrader 4.

Tip #7: Ways to quit your trade before a significant news release

I prefer to quit my trades around 2-5 minutes before the release (in case of the most significant
news for example like Rate decision even sooner). I usually watch the 1-minute chart to see what
is going on with the smaller perspective. For example, if I see that there is a channel on 1-minute
chart, I try to end the trade at the extreme of the channel. In this case, it is not likely that the
market will shoot out of the channel before the release. By closing in this manner, I can make the
best of the situation I’m given. Sure you can wait and pray, but remember, time is running out, so
it’s best to take the first logical exit.

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Another example is when the price action doesn't slow down in a tight channel. In this case, I try
to exit my position at the closest resistance that I can see on the 1-minute chart. This resistance
is usually some type of price rotation (= small volume accumulation area) from which some buying
or selling activity started.

It could look like this for example:

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Tip #8: When to start trading again after the news release

The general rule to follow is this: start trading again when the post-news volatility has calmed
down. However, this can sometimes be a bit hard to tell.

What helps me is to first check the type of the macro news. If it is really strong news like an
Interest Rate Decision (or following press conference), NFP, CPI, GDP, then I expect heavy
volatility and I am more careful about trading again after the news was released. Also, if such a
strong macro event causes a one-sided movement (= strong one-sided uptrend or downtrend),
then I am extra careful, and I prefer not to take any trades until I am really sure the markets
calmed down. The risk of a strong and aggressive movement pushing past the level is just too big
to take, and it is usually better to be safe than sorry. What I prefer in a situation like this is a
reversal trade (more about it in tip n.10).

If the news is not as significant (for example Building Permits, Oil Inventories, Retail Sales,
Unemployment Claims), then I don't really expect the impact on the markets to be that severe. In
such cases, I only wait a bit for the price to calm down and then I am happy to trade again. This
can be for example 1-10 minutes.

Tip #9: Re-enter a trade after a macro event has passed

If I quit a trade before news and the news doesn’t cause a significant enough spike to have hit SL
or PT, I try to re-enter the position if I get a chance to enter at the same or better price as before.
I only re-enter if the volatility has settled down and if the price didn’t go near the Profit Target
(let’s say around 75% or more). I also re-enter only when I still believe it could be a profit. How
do I determine this? As an example if I have a level I’m looking to go long from, I want to see a
sharp and fast rejection of lower prices (1-minute chart) if I am going to enter my position again.
If there is just a weak low and the price only slowly rotates at the reaction point, I am usually a
bit hesitant to re-enter, and I may not re-enter it at all. In the two pictures below, you can see a
short trade that I quit before the news and re-entered it after it. You can also see the sharp
rejection of higher prices that assured me to re-enter the trade.

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