Well that is nice and simple but the important facts to keep in mind are – its not news stories that move price, its the traders opinion of them that does and this leads us to look at two basic errors most traders make when trying to work out price direction:
Many traders think they can predict prices in advance and prices move to science or some higher force but humans make a price and their not predictable, their creatures of emotion not of logic and prediction is really hoping or guessing.
There is a huge industry in cheap Forex robots and Software which says you can predict the future but these robots all lose money, as the predictions are as accurate as your horoscope. Forex trading is a market of probabilities not certainties and that’s a fact
You cannot trade news stories a huge number of traders try to though, as the news is not important, its the traders view of the news which is. We all have the facts to look at but we all draw our own conclusions from them and this makes trading news stories impossible – want evidence of this? Then consider this, every bullish currency collapses when the news is most bullish and rallies when its most bearish.
Another common error is to think that you can day trade or scalp and win; while at one time you could make money this way, when only a small handful of traders had the price before everyone else, in today’s world of instant price information, this advantage has gone and all short term volatility is random.