Mastering News Events: Using the Economic Calendar to Frame Market Moves

Today, we’re diving into the frameworks surrounding news events and how to use the Economic Calendar to anticipate market moves. If you’ve ever wondered why trading on high-impact news days can be tricky, it’s likely because you lack an understanding of news frameworks. Let’s break it down.

Understanding News Frameworks

Trading during high-impact news events can be challenging without a solid understanding of the underlying frameworks. Here’s how to use the Economic Calendar effectively:

The Economic Calendar Strategy

1. Don’t Trade the News Release: Instead of trading the actual news release, focus on anticipating the potential framework that the news release might create. Use this anticipation to frame the next market move.
2. Manipulation and Expansion:
   • After Manipulation: Expect Expansion or Distribution.
   • After Previous Manipulation: Potential for further Expansion.

Predicting News Impact

At the time of a news release, two primary outcomes are possible:

1. Manipulation
2. Expansion

Determining the Framework

To understand which framework might unfold, observe the previous price action. The structure lies in the previous market action. Ask yourself:

1. Was there previous manipulation?
2. Are we currently ranging or trending?
3. Did we have a significant shift in market structure from a higher timeframe PD array?

By answering these questions using previous price action, you can predict whether manipulation or expansion will occur at the news release.

Frameworks for Determining News Impact

1. Previous Manipulation:
   • If there was previous manipulation, expect the news release to expand the market.
2. No Previous Manipulation:
   • If there was no previous manipulation, expect the news release to manipulate the market.
3. Ranging Market:
   • If the market was ranging, expect the news release to manipulate one side of the range.

By identifying these scenarios, you can frame the next potential market move.

Practical Application

1. Use the Economic Calendar for direction.
2. Use Market Structure to understand the framework.

Conclusion

By mastering these frameworks, you can better anticipate market moves during high-impact news events. Use the Economic Calendar to guide your trading decisions and rely on market structure to understand the underlying framework.

Have a great day and happy trading!