The example you see above takes place on the 1-minute chart of the EUR/USD chart. We will demonstrate how to scalp for a quick short-term price move resulting from an economic data report. In this example case, we take the release of the US ADP Nonfarm Employment Change on February 1, 2016. The figure released is 246K, which is 81K more than the expectation of 165K. This means that the US ADP Nonfarm Employment Change is more optimistic than consensus estimates, and as a result, this is bullish for the Dollar and we should have at least a short term move down for the EURUSD pair. We instantly short the EUR/USD on the print of this data, again, on the assumption that the US Dollar will increase versus its European counterpart as a result of an immediate reaction to the better than expected US data release. We short the EUR/USD and place a stop loss order at a relative distance from the entry point. As you can see, the EUR/USD price drops quickly and sharply affected by the optimistic US data release. Keeping in mind that this is a scalp trade, we hold the trade around 5 minutes and then exit the market. Note that if the data release was worse than expected (pessimistic), you would have bought the EUR/USD on the assumption that the USD will depreciate versus the EUR. In other words: To short the EUR/USD based on economic data release, you either need positive data coming from the United States, or negative data coming from the Euro Zone. On the contrary, to buy the EUR/USD based on economic data print, you either need good economic data from the Euro-Zone in relation to expectations or bad data from the United States in relation to expectations. It works the same way with other currency pairs and the respective economies they represent. This is a rather generalized explanation, but serves to illustrate the thinking and mindset when trading the news for short term reactions. Conclusion • There are two primary types of Forex trading approaches: o Technical Analysis – Involves the use of trading tools like indicators, oscillators, candle patterns, chart patterns, trend lines, channels, support, and resistance levels. o Fundamental Analysis – Involves the use of economic indicators and data releases. • You should choose a forex trading strategy that is best suited to your own personality. In addition, you should keep in mind that technical and fundamental analysis are not mutually exclusive approaches. You can combine them into a cohesive trading strategy to gain benefits from both viewpoints. • Three basic trading strategies we discussed are: o Chart Pattern Trading: Using price action analysis to spot chart formations. o 2 SMA + Volume Indicator: Dual SMA crossover supported by increasing trading volumes. News Scalping: Waiting for impactful news releases to take advantage of short term volatility expansions.