Forex News - A Tip For Massive Gains and an Opportunity Right Now

Many forex traders what to use for ex news to generate buy and sell signals for profit and here we are going to give you a simple powerful tip, you can use to catch the really big moves and big profits.

There is an old quote that says: "If you can hold your head around you while everyone else is losing theirs you probably haven't heard the news"

This is the basis of the tip we are going to explain here. It works in currencies or any financial markets.

You are looking for news that has moved the market already and an extreme in investor sentiment, where the news is discounted and prices have moved to far from fair value and no longer reflect the facts.

You are effectively looking for news that is discounted and an emotional spike in price to far away from fair value.

Live Trades and $20,000 In Potential Profits

Let's start with an example in one of the most sentiment driven markets of all ( before we look at currencies), crude oil.

Regular readers of my articles will know that I am a crude oil bear, crude is simply overpriced. There is plenty of it about and world demand is dropping.

The true value is about 80.00 a barrel.

Every time sentiment has pushed it up toward the psychological $100.00 we have sold it - look at our other articles. If you would sold on the last two pops to this level, you will have seen the decline is $20,000 based upon 1 contract.

Its only sentiment that drove prices up - greed and fear drove the market NOT Supply and demand.

A CURRENCY TRADE EXAMPLE

Now let's look at a currency that is overbought and a huge profit to be made.

The euro against the dollar is the trade.

Regular readers again will know that 1.50 is the psychological number that traders want to target.

1.50 is too high just like $100 in crude is. This is simply sentiment driving prices near these levels and the euro will not trade above this level in our view and today its started falling.

The last time it got up we sold (see our other articles) and said it would target 1.46 it did and that's a tidy 600 pips profit.

It's up testing the highs again - but the bad news for the dollar is discounted in the price and its now only greed and fear driving the euro.

All the arguments you here for dollar weakness are discounted:

A 50 bps rate cut, a housing market in trouble, sluggish growth etc and there is no more bad news that's not known.

Now throw into the equation that the euro zone has problems of its own (which traders seem not to bothered about) and you could see a break in the dollars favour.

How far?

We expect the dollar to trade back to 1.46 and if this level gives way target 1.40

The majority don't agree with us (they didn't in crude either) but we won't let that bother us, were sticking with our euro short view to give us another thumping profit.

When looking for extreme bullish or bearish news to break a price always get confirmation of weakening momentum on your forex charts, so you are trading the reality and not getting in to soon.

Will Rogers once said:

"I only believe what I read in the papers"

He was joking but many traders simply take it as gospel when a news story says the dollar is going to fall into oblivion.

Hold your head, look at the facts and if prices gone too far to soon, get ready to trade against the losing herd.

Can you do the above?

Of course you can - it simply means standing back, examining the facts and then looking for trading signals on your forex charts.

This article was written at 8AM Eastern time 15th January by Kelly Price