Trading volatility from news


Using 30m-chart and follow the main trend (Using daily chart)

If the main trend is down,
You were short at the drop. then, buy cover while it's going between 50 and 618 of the cycle range, because a ridiculously fast move like that is usually pulled back by the market. Spikes in the cycle direction usually get filled - A 0-Wave formed by news.

If the main trend is up,
You can wait while the spike slow right down as a further guide before it starts to reverse - between 50-618 Fib, and look 1m-chart & 5m-chart to buy it and when the pair pulls back to about where it started from, sell it again.

The same works in an upcycle when the spike is up.

Put Stop Lost to against a fake movement.


Examples

The UK Consumer Confidence on 06/30/2011 was not listed in the DailyFX Calendar or other economic calendars, According to this survey, UK consumers feel worse about their current financial condition than the previous month. its -25 number sent GBP/USD the spike down.


Setup trade

The main trend is down (look at daily-chart)
gu063011trend.jpg


Trading at 30m-chart
gu063011news.jpg


Similar for EUR/JPy because of the positive correlation.

Setup trade

The main trend is down (look at daily-chart)
ej063011trend.jpg


Trading at 30m-chart
ej063011news.jpg


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