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Thread: Trading the news - What to avoid, what to know, and how to trade with it

  1. #1
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    Trading the news - What to avoid, what to know, and how to trade with it

    dear fellow members of forum,

    in this opportunity i'd like to share some trading tips for you according to my little experiences. this might be useful for traders who seek for market truth and i'm so sorry if this topic may not appropriate for experts because this actually intended for beginners to advanced struggling traders. hereby i'd like to receive all the critics about this thread later.

    description

    in forex trading, we often read about news trading. what's that all about anyway? briefly, news trading means we're trading by reading news information and gather all data to get the conclusions later. many traders specially those who believe in news, they take news as long term cause which move the market. but remember, understanding this fundamental analysis isn't as easy as it looks.

    what to avoid?

    1. other people's thoughts on any forum discussion. believe in our own analysis and understanding.
    2. many opinions from experts about news could be a trap, exercise caution and don't believe them easily without self-analysis.
    3. only take high impact news for better volatility which usually indicated in red on many news calendar.
    4. avoid news trading if you're not certainly sure about what you read.
    5. only trade when you sure the market become dovish or either hawkish.
    6. don't gamble with news with random trades.
    7. avoid using indicators because they may not work properly during the news release.


    what to know?

    1. news is full of surprise and may cause instant movement within seconds.
    2. it's hard to take orders during news release due to market highest volatility.
    3. pending order works fine but sometime it may costs us some missing pips of opportunity.
    4. the rule of "history repeats itself" isn't always happening with news trading so be careful.
    5. always pay attention to current currencies growth and weakness.
    6. focus in long term progress, not in shorter term.
    7. take times to understand about the same news with its different movements yet the same result.


    how to trade the news?

    1. choose which news we want to trade. example, i want to trade with today's official bank rate of gbp. i use the calendar of forex factory.


    2. analyze the previous result and make some reviews about couple releases back. and don't forget to read another related information below.


    3. make some comparisons between previous releases. gather the ideas later.



    4. look at current price movement, mark the release hour to ease our trading.


    5. later when the time comes, set pending order with buy stop and sell stop 20 pips away from current market price.


    6. let the market runs for you and you can either set the take profits based on your money management or cut the trades later directly by yourself. it's up to us.


    notes:
    1. practice this method many times and experience many news trading in demo first before using it on real market.
    2. stop loss amount may vary and try to set it along with the pending order. try to set the stop loss amount by risking 20 pips only.
    3. never trade the news without stop loss.
    4. i don't explain about how to place the stop loss because i think everyone already aware about the risk of trading. anyway, i also wrote it on my 2nd point above.
    5. stay patience because the reward may be greater good with only by risking only 20 pips.

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  2. #11
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    Lots of investors noticed how to work US economic numbers, in such cases more affordable job generation values, could probably affect a FED decision to decrease interest rates. The final decision would in fact be made in the future, on the other hand, the rumours of this possible drop was enough to cause a depreciation in the US dollar.

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    Quote Originally Posted by laregunung View Post
    Lots of investors noticed how to work US economic numbers, in such cases more affordable job generation values, could probably affect a FED decision to decrease interest rates. The final decision would in fact be made in the future, on the other hand, the rumours of this possible drop was enough to cause a depreciation in the US dollar.
    Fact is that it does not always come out that way, some times it affects the market and then some times it does not. Therefore what I will say much about that is that we don't have to actually depend on the calendar to trade the news, perhaps combination of the technical analysis could make the signal more better, I am just saying since we are in a risky market we have to be careful and not to take any trades without good discipline approach.

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    Trader sniper007's Avatar
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    Quote Originally Posted by Real View Post
    Fact is that it does not always come out that way, some times it affects the market and then some times it does not. Therefore what I will say much about that is that we don't have to actually depend on the calendar to trade the news, perhaps combination of the technical analysis could make the signal more better, I am just saying since we are in a risky market we have to be careful and not to take any trades without good discipline approach.
    There is and can not be certainty in the market of if there were to be certainty then a lot of people would have been able to make so much money out of the market,, the news trading is what I absolutely have learned on how to avoid, yes, I don't take any news that has to do with the news trading method, I instead based all my experience on technical method of trading.

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  5. #14
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    Quote Originally Posted by sniper007 View Post
    There is and can not be certainty in the market of if there were to be certainty then a lot of people would have been able to make so much money out of the market,, the news trading is what I absolutely have learned on how to avoid, yes, I don't take any news that has to do with the news trading method, I instead based all my experience on technical method of trading.
    The more reason why any method we want to make use of has to be learned, I don't like the news trading as well, I don't make use of it because I understand the market and I know that the method we have to make use of has to be the method we have learned and known. I have observed that the value don't have the impact as expected most of the time, so it is more better I prevent the news trading.

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  6. #15
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    I think for trader it is best to trade with news if we have fully understood , it is so impressive way to trade as we get knowledge about the market , i love to trade with news because it require more knowledge and understanding of the market it will be effective and more better to trade with it so we will gain success and have better trading system with it .

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  7. #16
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    I have traded the news so many times and lost money on almost all those occasions. What I learnt by trying several methods of trading the news is that the best tactical strategy that can realistically guarantee trading profits at least 50% of the time is the Straddle Strategy. Sometimes the price spikes in one direction and instantaneously reverses, only to spike in the other direction - this mainly happens in very volatile market conditions and often triggers both legs of a Straddle strategy leading to multiple losses. I think the strategy presented in this thread by Yayami can be used to improve the number of winning trades when combined with the Straddle trading strategy. However, it is very important for the trader trying these methods to trade with extreme caution and trade with no more than 5% of their trading capital - the importance of this, as in most trading strategies, cannot be over-emphasized.

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    Registered user Stefano's Avatar
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    Quote Originally Posted by Obie View Post
    I have traded the news so many times and lost money on almost all those occasions. What I learnt by trying several methods of trading the news is that the best tactical strategy that can realistically guarantee trading profits at least 50% of the time is the Straddle Strategy. Sometimes the price spikes in one direction and instantaneously reverses, only to spike in the other direction - this mainly happens in very volatile market conditions and often triggers both legs of a Straddle strategy leading to multiple losses. I think the strategy presented in this thread by Yayami can be used to improve the number of winning trades when combined with the Straddle trading strategy. However, it is very important for the trader trying these methods to trade with extreme caution and trade with no more than 5% of their trading capital - the importance of this, as in most trading strategies, cannot be over-emphasized.
    news trading looks very profitable and promising indeed but doing so requires a lot of trading skills and we have to manage ourself to act quick during the release of the news. i myself find it too difficult to do and just like what you had experienced, i lost as much money as i tried to trade the news. such spikes which caused by news usually kill my account easily because market always hit my stops.

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    Rookie Yayami's Avatar
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    Quote Originally Posted by Real View Post
    Though my trading hand is yet to be that strong but in all we do, this advice will always be valid, because come to think of it, we have to trade and follow the market the way we have learned it. However the news trading is not what I will engage with because the demo experience of something similar was not really giving me that much as expected earning.
    first thing to say is thank you my friend for giving my thread a thumb, hope this gives you some useful information. trading the news is basically a good idea to make huge profits within short period of time. and according to my 2nd point above in my first post, it's bit thrilling to do for news trading to listen to the critics and opinion from what so called analyst about market. we must not believe them easily since they're human too, they could be wrong and never stays correct.

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  10. #19
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    Quote Originally Posted by Yayami View Post
    first thing to say is thank you my friend for giving my thread a thumb, hope this gives you some useful information. trading the news is basically a good idea to make huge profits within short period of time. and according to my 2nd point above in my first post, it's bit thrilling to do for news trading to listen to the critics and opinion from what so called analyst about market. we must not believe them easily since they're human too, they could be wrong and never stays correct.
    really this is good thread which should be known well by traders who want to be a real trader, and especially to trigger us to always believe ourselves and open mind to increase the knowledge and skill for better trading in the future
    i combine technical analysis with fundamental analysis where the news become the best way to validate my trading ideas, i have similar points with yours above and that makes me feel better to decide at thing during at the market

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  11. #20
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    Quote Originally Posted by mr.big View Post
    really this is good thread which should be known well by traders who want to be a real trader, and especially to trigger us to always believe ourselves and open mind to increase the knowledge and skill for better trading in the future
    i combine technical analysis with fundamental analysis where the news become the best way to validate my trading ideas, i have similar points with yours above and that makes me feel better to decide at thing during at the market
    It gives much insight on how to succeed with the news trading and those who fancy such trading method could try put it to practice on the demo account to see if the result will be good. I personally have tried a lot of news trading method and I never got a good result but my technical trading method now works fine for me and I will be sticking to it more often now.

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