EA EURONIS - FREE Expert Advisor. Discount rate. Earns applying the strategy of trading on the news

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Discount rate. Earns applying the strategy of trading on the news.

This article is written in continuation to material that was recently published on our website under the name earns forex market reaction to change the discount rate. Here I'll share directly to their trading experience before, during and after the release of news about changes in the discount rate. And will be discussed is the situation in the United States, because the interest rate announcement in the U.S. as compared to similar news in other countries is to put it mildly, a little bit different reaction on the interbank forex market.

So, the first situation. Politics U.S. Federal Reserve (the Fed) is almost always clear, the market knows what decision will be taken. In this case, we build our forex strategy as follows. If the Fed will raise rates, the dollar will strengthen in relation to other currencies, with its upward trend will be advanced. This means that for a month or even two months before the announcement of a new discount rate of the dollar will rise against the euro, pound and other currencies.

At the same time increasing the discount rate of direct reaction to the market, as a rule, very discreet. If the dollar strengthens and then only marginally. In some cases there is a correction, triggered a rule - buy in anticipation, sell on news. We must carefully monitor the market reaction to 22.15 Moscow time and be prepared to stand in the desired position. Still, as a general rule, the market practically does not react to the output of the expected news.

And the last remark here, as a rule, in the period before raising interest rates on dollar bullish trend, therefore, I do not advise you to trade in this period against usd

Second situation. It happens rarely, but nevertheless it does happen on the forex market. Over the past few years, this happened repeatedly. Experts and analysts do not know what will be the Fed's decision. The rate may be at increased or reduced, and may remain unchanged. This is where the market is really storming after the news, especially if the decision was very unexpected.

For example, traders were waiting for a raise, and took the bet and even demoted. In this case the U.S. will sell like hot cakes in the cold. A pair eur / usd can striding several hundred points up or down. Personally, I previously put the pending orders to open positions and wait calmly market reaction.

Example, most forex traders think that the rate will drop, some believe that he will remain at the same level, and only the hot heads are waiting to improve it. I put a warrant for the purchase of the dollar in paragraphs 30-40 of the current prices. My arguments are as follows, if you happen to like all believe the market will not budge and I quietly shut its order. If you take an unexpected decision in this case, the increase, the price will fly far up, and I can make almost all the movement in exchange rates.

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