How to Trade the News With a Directional Bias.

Let’s stick with our unemployment rate example to keep it simple.

The first thing you would want to do before the report comes out is to take a look at the trend of the unemployment rate to see if it has been increasing or decreasing.

By looking at what has been happening in the past, you can prepare yourself for what might happen in the future.

Imagine that the unemployment rate has been steadily increasing.

Six months ago it was at 1% and last month it topped out at 3%.

You could now say with some confidence that jobs are decreasing and that there is a good possibility the unemployment rate will continue to rise.

Since you are expecting the unemployment rate to rise, you can now start preparing to go short on the dollar.

This is your directional bias.

Particularly, you feel like you could short USD/JPY.

Just before the unemployment rate is about to be announced, you could look at the price movement of USD/JPY at least 20 minutes prior and find the range of movement.

Take note of the highs and lows that are made. These will become your breakout point

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