How do you trade the news in forex trading?
How do you trade the news in forex trading?
A lot of people have been asking on how to trade the news.
although i strongly do not recommend just trading based on news only, but here’s some pointer.
1. News are categorised into the level of impact. low, medium, high
just like the word high, high impact news can change the trend of the market. changing a downtrend into an uptrend and vice versa.
some medium impact news do have such capability too.
2. watch out for the upcoming important news weekly and daily.
and note which pair will the news affect.
3. if you are in a position and there will be an upcoming high impact news in 2hrs time.
take either half your profits first as the market will start going frenzy usually 2hrs before the news. shift your stoploss to breakeven. this way, if you are going long and the news impact reversed the market, you still got half your profits and broke even on the other half.
4. if you are not already in position before the news. wait for 10 mins after the news is out before entering. as in the first 10 mins, you will see price go spiking around and it happens alot of time when once the news is out, price goes spiking up real fast. you will be there thinking if you don’t catch the boat now, you are going to miss a hell lots of pips. and when you got in at the high, price went spiking even faster downwards. what the..?!
did this happen before to you? Don’t worry,it happens to every one.
this is how the market works.
one reason is that when the news is out, major players throw in a sum of money enough to move the market up. when people sees the market moving up, they jump in to push it even higher as they went in with the ‘fake’ movement. the major players then wait for price to go up high enough and then they step in to throw in large influx of money to short it. gaining great amount of pips in a short period of time. i know this happens, and it happens a lot of times.
the other reason is that, the market is based on sentiments. even though the news is positive, and people start buying it long. making the market move up. but if the general market feel that the news is not as good as expected or for some other reason. the big players and professional traders will start shorting it. leaving the losses to those who just traded on positive news.
therefore, one way to go around it is to wait for 10 mins after the news is out to evaluate the REAL market movement before entering.
but as always, i highly recommend adding price action confirmation to it. then you have a high probability winner.
i hope this article helps and leave me a comment to let me know how you feel or any additional input you would like to add are welcome.
Asia Forex Mentor,
Ezekiel Chew from www.asiaforexmentor.com
A complete professional forex trading system that even newbies can apply instantly. Asia Forex Mentor's forex course is now FREE!
News trading may be good for short term traders. But a long term trader never cares much about news.
Stick to your rules
Nice article. Good points given. A couple of them are really new to me. Thx for sharing it with us
I have never traded on news. But it is a good article for intrduction to news trading.
[QUOTE]the other reason is that, the market is based on sentiments. even though the news is positive, and people start buying it long. making the market move up. but if the general market feel that the news is not as good as expected or for some other reason. the big players and professional traders will start shorting it. leaving the losses to those who just traded on positive news.[/QUOTE]
This is an important point in the article. It can be considered as disadvantage of news trading. Only big players can get advantage of it.
Stick to your rules
Originally posted by uniquetrader[QUOTE]the other reason is that, the market is based on sentiments. even though the news is positive, and people start buying it long. making the market move up. but if the general market feel that the news is not as good as expected or for some other reason. the big players and professional traders will start shorting it. leaving the losses to those who just traded on positive news.[/QUOTE]
This is an important point in the article. It can be considered as disadvantage of news trading. Only big players can get advantage of it.
news do not hve much effect. It may be good for scalpers. But technical indicators provide long term solution.
Originally posted by Jogi
Originally posted by uniquetrader
[QUOTE]the other reason is that, the market is based on sentiments. even though the news is positive, and people start buying it long. making the market move up. but if the general market feel that the news is not as good as expected or for some other reason. the big players and professional traders will start shorting it. leaving the losses to those who just traded on positive news.[/QUOTE]
This is an important point in the article. It can be considered as disadvantage of news trading. Only big players can get advantage of it.
news do not hve much effect. It may be good for scalpers. But technical indicators provide long term solution.
Actually it also depends on ur trading style. Some traders love to trade by fundamental analysis. News trading looks risky to me.
one has to be good before he dpends n the news for trading
I believe is having good technical and fundamental analysis before hand and then only we can perform profitable trades on the basis of any news release or update when we know the impact of a particular news update on the markets .
well l dont trsut news at all.l think an individual cant just relay on news since we really dont know how to price them.that is why l just look at them for knowledge but l never trade with them.l prefer to use technical indicators always.
it is very difficult to trade the news, I advise beginners to abstain at the time of publication of news, because it can cost them their entire accounts
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