What is Straddle trading?
Straddle trading is simply a method of placing two pending orders, a buy stop above the
current price of a currency pair and a sell stop below the current price of a currency pair. Traders use
this method when they anticipate the continuation of current price movement or trend, or to take
advantage of quick spikes in price at the release of news information. The basic concept of straddle
trading is very straight-forward: you place a pending buy order just above the current price and a
pending sell order just below the current price (in our case: before a news is release) and you wait for
one of them to trigger when the price breaks out of the range (this breakout occurs very quickly when
this is a spike cause by a news release).
The idea is that price will spike sharply in one direction when the news is releases and because you have
pending orders in both directions, you will make a profit no matter which direction the breakout
occurred to. This sounds like a great strategy in theory, but unfortunately it is never that simple in