Trading the ‘news’ before it happens, or in the lead up to an economic data release, is often viewed as less exciting than the fast-paced environment of trading during or after the release. However, there are many underutilized opportunities that present themselves during this less volatile period that forex traders can hunt for.
With this strategy, traders have the opportunity of entering at the start of an accelerating trend in order to capitalize on as much of the advancing market as possible. The pre-release calm strategy looks to trade within a range that develops when the market is relatively quiet leading up to the release. Due to the relative lull in the market, traders often overlook this opportunity and wait to trade after the news when the market is more unpredictable.
Volume is often light so price will have a tough time pushing through those levels and as a result, the market can often be described as non-directional .: Traders can look to buy at support and short at resistance, placing stops below support and above resistance. Targets for long trades can be set at resistance and targets for short positions can be placed at support.