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

  1. #1
    Rookie Yayami's Avatar
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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. #21
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    with news trading one thing you should remember before the news announcement check what is technical signal, if technical is down and news is positive then hold position for just some pips because after news effect it can go down at same candle, if there are many news then check their correct timing and use proper order because some time market go 50 pip down in 5min and in next 10min it can go up for 100 pip, there are lot of examples you can check in history of chart

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  3. #22
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    Quote Originally Posted by Striker$ View Post
    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.
    thank you very much for feedback my friend, this is really good input for me and others too where actually we only need to know for what we are doing, there are several trading methods and may one of them is good for us, and so if feel not good with news for trading and there will be always the solution to keep trading with technical analysis and even many of them had already made the success too
    for me, the ideas to combine technical analysis with fundamental analysis just to get good accuracy, know the market condition then decision is made with low mistakes and it means we have more chances to book the profit.

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  4. #23
    Trader Sixteen's Avatar
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    News trading is one of the most risky times to trade forex because there is a high volatility that could hike prices and make fast unexpected movement. Some do prefer to exit from the market and wait to enter after news release why some love this volatile market to see if they can make some good numbers of pips in a short time. Anyway news can be profitable as well as risky which is why we must have better plans too on our management so we can survive even its against us.

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  5. #24
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    Quote Originally Posted by Yayami View Post
    practice this method many times and experience many news trading in demo first before using it on real market.
    This is very educative and this indeed will help some traders out there who do not know how to trade with the strategies you just showed us here.However just like you rightly said,the need to practice many times on the demo account is needful because due to greedy attitude, some would just go straight and begin to trade on their live account without any form of experiment in order to know how effective it is.

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  6. #25
    Rookie Yayami's Avatar
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    Quote Originally Posted by Sixteen View Post
    Seriously I try to avoid news trading because the uncertainty is too much especially on a very high impact news. Sometimes you could think that the data information you have about an event will make you eventually take the right trading decisions but you end up still loosing out when it's wrong. The truth is that news can make us lots of profits and can also cause us to loose big too. We have to be very careful if you decide to trade them and know that there is every uncertainty in trading news.
    try to trade only high impact news and avoid trading the low to medium ones. it's great to have the news traded with pending orders and this actually requires us to experience the same news before so many times so we can make some predictions how market would move before and after the release. it's risky though but the reward is very satisfying. i once get the result from news trading and it made me stay away from trading for a week because i enjoyed the big profits.

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  7. #26
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    trading with news means that traders open trades when the high or medium impact news release in the market and traders ope their positions to get the benefit through it so that they can make urgent profits by claiming the trade hit as the market hit the level due to the release also some traders trade on the post impacts of news or pre imparts like buy on rumors and sell on news.

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  8. #27
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    Quote Originally Posted by Sixteen View Post
    News trading is one of the most risky times to trade forex because there is a high volatility that could hike prices and make fast unexpected movement. Some do prefer to exit from the market and wait to enter after news release why some love this volatile market to see if they can make some good numbers of pips in a short time. Anyway news can be profitable as well as risky which is why we must have better plans too on our management so we can survive even its against us.
    true, it is, but then again, you see some traders are still liking the approach. Well, if we want to make money from the market, we need to be patient with the market. news trading is not usually profitable for the trader who don't understand deeper economist. But with the technical trading approach, we don't need those extra knowledge before we can trade successfully.

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  9. #28
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    in my point of view news trading is very risky as you know that news can impact the market with high volatile or low volatile so this condition can give you a good amount of profit but it may be possible that it can give you a huge lose so for me technical analysis is very important to used while follow news analysis to save your trade from margin call and blown up situation.

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  10. #29
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    in trading there are many skills tools and wide knowledge that is helpful for trading,in all that way with all these the news are very strong key for trading,it is also very helpful because market movement depends on these news,news effects very much on market movement so this strategy with news also a good strategy

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  11. #30
    Registered user Stefano's Avatar
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    Quote Originally Posted by elenor View Post
    in my point of view news trading is very risky as you know that news can impact the market with high volatile or low volatile so this condition can give you a good amount of profit but it may be possible that it can give you a huge lose so for me technical analysis is very important to used while follow news analysis to save your trade from margin call and blown up situation.
    chances are equal between risk and reward when we want to trade with news. it's right we better stay off from market during news time to avoid market high movement and unstable. personally i don't like trading with news because i have bad experience with it. everytime i traded with news, and so that much times i lost my trades and closed it with stop loss. still a good thing i got stop loss as my backup.

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