Forex Trading Strategies Based on News: 2025 Edition.

          In the past, there was a saying, “Information is power” and those who know how to use it are the winners. It has been proven that trading Forex based on news can be effective. But what about in 2025? Is the strategy of trading Forex based on news still viable? What adjustments need to be made? We'll find the answers in today's article.

What is News Trading and what are its forms?

          News Trading is a buying and selling strategy that relies on analyzing and responding to economic and political news events. Traders monitor and assess the impact of news on financial markets and various assets to make trading decisions. This trading style often depends on quickly receiving news and accurately interpreting its effects. Traders may use tools like economic calendars, which compile schedules of important economic data releases, allowing them to prepare and plan their trades in advance.

News trading is a strategy that allows traders to effectively capitalize on major economic and political events. However, success in this strategy depends on careful planning and user-friendly tools. At IUX, we provide superior services compared to others, with fast order execution and stable spreads, enabling you to trade according to your plan seamlessly. Switch to IUX today for uninterrupted, trend-focused news trading.

How to read an economic calendar

          An economic calendar helps us stay informed about upcoming economic events and data that may impact financial markets and investments. Regularly studying the economic calendar helps us prepare for potential volatility. Typically, an economic calendar displays information such as the dates of economic data releases, types of data, and expected impacts. We should pay special attention to high-impact events. Analyzing information from the economic calendar, along with following news and conducting technical analysis, can help us make more effective investment decisions.

Understanding the Basics of an Economic Calendar

          An economic calendar shows the schedule of important economic events and data. The key elements to remember are the forecast figures, previous figures, and actual figures when announced. We'll delve deeper into this content later in this article.

• Date and time of the event

• Country involved 

• Name of the event or economic indicator

• Importance level (often shown with stars or colors)

• Forecast figures

• Previous figures

• Actual figures when announced

Key Numbers to Monitor

• Central Bank Interest Rate Announcements

These are crucial tools for setting monetary policy, affecting borrowing costs and interest rates in the financial system. Rate hikes typically strengthen the currency but may slow economic growth.

• U.S. Non-Farm Payrolls (NFP)

This shows the number of new jobs added in the U.S., excluding agriculture. It indicates labor market conditions and economic growth. Higher-than-expected figures often positively impact the dollar.

• Consumer Price Index (CPI) and Producer Price Index (PPI)

These measure changes in prices of goods and services. CPI reflects inflation faced by consumers, while PPI shows producers' production costs. Both influence central bank monetary policy.

• Gross Domestic Product (GDP)

This is the primary figure used to measure the total value of goods and services produced in a country. It indicates economic growth. Higher-than-expected GDP often positively affects stock markets and currency values.

• Retail Sales

This reflects consumer spending, a significant component of GDP. Strong retail sales indicate a growing economy.

• Purchasing Managers' Index (PMI)

This survey gauges the opinions of purchasing managers in manufacturing and service sectors. A value above 50 indicates economic expansion. It's an important leading indicator of economic trends.

Important news affecting the Forex market to follow in 2025

Economic and Financial Events

• The Federal Reserve (Fed) and European Central Bank (ECB) meetings on interest rates and monetary policy, which will directly affect the dollar and euro exchange rates

• Important economic data reports such as GDP, inflation rates, and unemployment rates from major economies

• Release of international trade and balance of payments reports, especially from the US and China

• The recovery of major economies worldwide following challenges in late 2024

Global Events

• The inauguration of the new US President in January 2025, which may lead to changes in economic and trade policies

• Progress in trade relations between the US and China

• Development of Central Bank Digital Currencies (CBDCs) in various countries

• Advancements in AI and digital technology use in the finance and banking sectors

• Risks from prolonged inflation, especially in Europe

• The state of war in the Middle East

• Changes in global supply chains and production base relocations

Techniques for reading and interpreting news for Forex trading

          Effective news analysis helps traders better predict market trends and plan their trades. In this section, we'll introduce techniques for reading and interpreting news for Forex trading. We'll cover five key principles for interpretation.

1. Analyze market expectations before news release and compare them with actual announced figures. Large discrepancies often lead to volatility.

2. Focus on major economic news such as interest rates, GDP, unemployment rates, and inflation, which typically have significant impacts on currency values.

3. Consider how news affects monetary policy and future interest rate directions.

4. Monitor statements from central banks and key policymakers to anticipate future trends.

5. Analyze relationships between different news items and their potential combined effects. Evaluate both short-term and long-term impacts of news by examining historical Forex exchange rate data in relation to important economic announcements.

Techniques for trading Forex during news announcements

          Start by checking Forex Factory (search on Google) and select high-impact news events such as interest rate announcements, employment figures, and GDP reports. Focus on news with moderate to high impact. Analyze the market and plan ahead by examining charts for the two days before the news release to observe trends and market sentiment.

Identify key price levels, plan your trade entry, and set your stop loss and take profit in advance. Wait for the market's initial reaction to the news. Avoid entering trades immediately after the news release; instead, wait at least 10-30 minutes after the announcement.

Use a breakout trading strategy by placing buy and sell orders above and below the current price before the news release. You can reduce your trade size and leverage during periods of high volatility. Signals for going long or short will be based on your assessment of the direction of the figures announced in the news.

When the actual figures are released, they will cause the price to rise or fall. Therefore, study how the currency pair you're trading relates to the economic data. Figures better than expected will positively impact the currency, while worse-than-expected figures will negatively affect it. Use this information to determine your signals for going long or short.

Additional tips

Trading based on news doesn't always follow statistical patterns. The market can be highly volatile. Therefore, traders should have knowledge and understanding of fundamental economic factors and continuously practice news analysis skills to increase their chances of success with this strategy.

• Use an economic calendar alongside technical analysis to confirm trading signals.

• Study the impact of past events on the market to predict future reactions.

• Set alerts for important events to avoid missing information that could affect your trades.

• Consider the relationships between currencies and various assets when economic data is announced.