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

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    Registered user 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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    Quote Originally Posted by Yayami View Post
    2. many opinions from experts about news could be a trap, exercise caution and don't believe them easily without self-analysis.
    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.

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    Registered user Sixteen's Avatar
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    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.

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    We must need to trade with news because that is golden opportunity for us to earn in short time. We are normally take risk in our trading 20 to 30 pips every day and if we take risk 20 pips in news time then we can easily earn big profit within very short time. If we are lose one or two time on news trading then at least one time we earn profit and that profit is must be big from all of these losses.

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    When we trade at news time then we need very care and must need to use stop loss in our trades. I normally exit from my traders when any big news time is near or place tight stop before the news event is come. This market is not follow any trend when news are released then we must need very care at that time. Its better to stay from market and if your trade is active then close it as soon possible before the news.

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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.
    You are right about that and same reason why I try to avoid it as well, I don't want to be caught up in that uncertainty and have it make me loss my money. It is better to focus on the technical trading method that gives more certain view of the market than to follow the trading method of news trading, when you are not a good economist student.

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    When news are comes then we must need avoid that trades but if you must want to enter in this trade then you need to trade with following the trend. Some time news are big and no one know that where this market is move. So we first need to watch the market data and if its forecast is positive data then we need buy trade with tight stop loss and if forecast is in negative then we need to short trade at news time.

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    for me, i combine technical analysis with news, then it can complete each others and it means that i do not make decision before i see the correlation between both of them, and also need to know the news characteristic and what condition will happen at the market, and especially when the data at news such as previous , actual and prediction should be known well, then it become good point for us to decide our position, but if the prediction is not there or just ??? better for us to check the charts correctly

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    Registered user Senorita's Avatar
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    News can be very unpredictable that's why some traders are very scared to trade it rather they could easily hope for a better time to trade with a technical analysis setup. News can be very volatile and it can be a source of huge profits or huge loss and we must be careful. For me I care less about news as I follow my technical analysis means of trading not minding the news release because am hopeful a good setup can produce profits more often. Some scalpers see news as a way they can make big money and get to enjoy their trade.

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  10. #10
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    yeah you can make a good money with news analysis if you can used it in a long time frame with a good stop loss but it is always risky for a trader to place a trade by predict news analysis because some times news is very volatile and you never predict that where market can goes up so a strong strategy with technical analysis is very important to survive in the market and get profit.

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