Day trading the news or “news trading” usually refers to the popular practice in the forex market of day trading online a specific currency after the release of an economic report or statistic.
Each potentially market-moving report is released at a specific date and time every month – and there’s a consensus estimate for each released figure. Generally speaking, how much higher or lower than the estimate the actual numbers come in will dictate how a day trader will react (by buying or selling a particular currency).
Note that day trading the news is not the opening of a position before the report is released betting on a particular outcome. That is more like gambling (or financial suicide). No one knows in advance where the numbers will come in, so trying to predict the outcome is an extremely dangerous and futile endeavor.
Even though forex news day trading is risky by nature, the use of some specific tools might slightly increase the odds of day trading the news successfully. Some of these are: using a fast, reliable news service like Bloomberg, day trading online on a platform that offers one-click execution, and using limits rather than market orders to enter the market.
News day trading is not for the faint-hearted trader, but it can make forex online trading very profitable for those who approach it correctly.
