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

  1. #1
    Trader 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. #41
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    Quote Originally Posted by ravian View Post
    Many professional traders say that you should simply stay away from the market when the market is really volatile at the time of news because there is no a surety of happening of anything because no matter how much successful trader you are and how much professional you are when the market will become really volatile your account will be blown up.
    Mostly to the traders who don't know how to handle risk, if they get in the market when it is volatile then they could loss their money all to the market, hence we need to take time and learn on better ways to trade. But on this thread I have read good ways I see I can apply and follow the news and it works actually and I think I will try a little on demo.

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  3. #42
    Trader Yayami's Avatar
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    Quote Originally Posted by ravian View Post
    Many professional traders say that you should simply stay away from the market when the market is really volatile at the time of news because there is no a surety of happening of anything because no matter how much successful trader you are and how much professional you are when the market will become really volatile your account will be blown up.
    if that's their suggestions then we can trust them as market in high volatile is so risky and can't be easy to predicted unlike with sideways market. but remember that what kind of professionals are they because we tend to believe with performance of trading, not for how long they've been in business. one thing we should know about this business that time isn't what makes us professional. only a good result which steadily consistent in long term which make us a good and professional.

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  4. #43
    Trader sniper007's Avatar
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    The news trading in a nutshell is not something that will suit all traders because in forex trading there are various ways and method of making money and not all suites we all, we just have to learn from the demo account to know the method we will be making use of. News trading to me is not the method I will also encourage, I personally see it as gambling.

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  5. #44
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    Quote Originally Posted by sniper007 View Post
    The news trading in a nutshell is not something that will suit all traders because in forex trading there are various ways and method of making money and not all suites we all, we just have to learn from the demo account to know the method we will be making use of. News trading to me is not the method I will also encourage, I personally see it as gambling.
    news can be a form of gambling but its not actually, we people make it like gambling whenever news come to announce we people try to earn big and we invest more and with big lot we place order that thing give us big loss or profit so we also consider it as gambling but real gambling form is binary option not a trade, because it gives us profit with every point

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  6. #45
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    This is kind of best way to trade on news because in this market we see that their are lot of advantages of news trading and as we are doing our best to trade in this way we should plan better and will make good trade , we must have to know our risk on news and should take decision accordingly this idea come from own observation .

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  7. #46
    Trader layigold's Avatar
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    Do not trade the news except you have learned enough of fundamental analysis of trading and that even goes beyond the economic activities schedules on the calendar. I need to tell you that fundamental analysis is wider in scope than what so many people take it for . If you have all it takes to trade economic news in terms of knowledge, skills and experience , there is nothing stopping you going for any opportunity you see when news takes place once you have the ability to manage the risks of trading effectively

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  8. #47
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    Quote Originally Posted by layigold View Post
    Do not trade the news except you have learned enough of fundamental analysis of trading and that even goes beyond the economic activities schedules on the calendar. I need to tell you that fundamental analysis is wider in scope than what so many people take it for . If you have all it takes to trade economic news in terms of knowledge, skills and experience , there is nothing stopping you going for any opportunity you see when news takes place once you have the ability to manage the risks of trading effectively
    That is the reason why not every one can make use of it and it is just so not useful anyways. Because it has been proven that we can make money with the technical trading approach, therefore we don't need to bother our selves with going further to getting more and more knowledge about the fundamental trading complex trading method, whilst we can trade successfully with the technical tools.

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  9. #48
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    trading by news analysis is very risky because you can not sure about market position after releasing data that which impact the news have on the market if data is more volatile than it can change the position of the market suddenly and you can lose all your money so i mostly try to follow technical analysis that can fixed my profit either trade can move against me after sometimes that is much safer for a trader.

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  10. #49
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    i avoid news analysis because it can not be predictable you can take a chance with your trade, because sometimes news data have no impact on the market and sometimes it can give you a highly volatile data that can give you a big lose of money and market moves completely against you so i prefer to adopt technical analysis here to save my trade from such dangerous condition.

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  11. #50
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    Quote Originally Posted by liao View Post
    i avoid news analysis because it can not be predictable you can take a chance with your trade, because sometimes news data have no impact on the market and sometimes it can give you a highly volatile data that can give you a big lose of money and market moves completely against you so i prefer to adopt technical analysis here to save my trade from such dangerous condition.
    I am with you, the news trading is not what traders can guarantee, that is why i think it is safer for us to let go of it. The news trading is so risky and volatile, the traders that are doing it are gambling. But there are some traders who have this practical skills and calculative measures to trade it, they are the only ones i respect. They can enter the news trading in combination to what the long term technical trading say.

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