Straddle trade theory is another thing that we need to learn when trading huge news or extremely important reports that will undoubtedly lead to changes in forex market.
So. You see that there is going to be a huge and a very important report very soon. And you understand that under the influence your favorite forex couple is going to change the price. But you are not sure which way it is going to go. And simultaneously with that you want to profit. So. What to do?
Well. First of all, you need to chill! Being ready to the price turbulence is being half way there.
Your next step is going to be determining your entry points. For that you are going to go to the chart you are going to trade and look at it about 20 minutes prior to the report. There you need to determine lowest and highest points. In case of turbulence these are going to be your entry point… well, about 20 pips higher [in case of a low] and about 20 pips lower [in case of a high] point. This lets you have your initial target right there in your trading range.
This is what we call straddle trade theory.
And even though there are a lot of ways to trade the news, this particular one has rarely let traders down.
So, think about it when you are about to trade on the next big report.
