News Day - No Forex for Me!

This morning there were scheduled several regularly occurring announcements on the state of the U.S. economy, several of which tend to have a big effect on the direction of the U.S. Dollar, along with testimony before Congress by Treasury Secretary Tim Geithner. The news was good, which seemingly paradoxically tends to drive the USD down (I say "seemingly paradoxically" because the action reflects general economic confidence - the USD, being the world's safe haven, is where everyone flees to when times are tough, which drives the Dollar up; when times are good, people leave the safety of the Dollar and go looking for bigger gains elsewhere).

If you need a handy, easy to use tool for keeping track of significant news events, check out the Forex calendar provided by Forex Factory: http://www.forexfactory.com/calendar.php (You may need to set it for your time zone.)

I have successfully traded news events in the past, but in general I don't like to. It's utter chaos and my broker's trading platform doesn't seem to handle the increased load very well, so there's an element of "flying blind" to it as the charts begin lagging the action. My developing strategy seems to work best when there isn't news of any sort, a technical strategy rather than a fundamental one.

Last night I got in on a eur/usd long trade and employed the method I described the other day of scaling out of profitable positions while moving up stops to catch the rest. I sold half of my position when it hit resistance, moved up my stop to what looked like support, then wandered away from my computer to feed my cats. The resistance point turned out to be the beginning of a reversal that took the price action down past my initial entry, but since I was already out with profit and because my stop order was also locking in profit, I was fully protected and cashed out with a gain larger than what I would have had if I had kept the full position and used a stop alone.

So now I'm at 3.12% NAV increase for the week, well past my weekly target, with a few more days of interest to collect. I'm content to sit out the market this morning.