Why news is not for beginners
Profitable news trading strategy
It is sometimes extremely difficult to predict the price movement driven by strong economic or political news. High-speed robots frolic here, trying to grab their jackpot in seconds. But an ordinary person has a hard time.
And why? Because the price of strong news often shows completely chaotic behavior. The price rushes up and down, showing wild shadows and long candles that fly wherever they want.
News trading has extremely many risks
What news to trade
Since only the most important news strongly affects the market, the rest can be completely ignored, because there is less sense with them. Of course, the key news of the world is the data on the American economy, for the US dollar is the key reserve currency of the planet
Retail sales data.
geopolitical news (war and disaster); GDP data.
EUR/USD; GBP/USD; USD/JPY; USD/CHF; USD/CAD; AUD/USD.
15 minutes rule
So, having determined the important news, you just need to wait and enjoy the picture, how the price bears, how abnormal, throughout the schedule, knocking out stops in forex and shocking beginners. 15 minutes after the news release, as a rule, there is a rollback against the news trend – those who wanted to play enough, the others carefully feel the reversal. However, it is often short-lived.
30 minutes rule
Half an hour after the news was released, the main speculators calmed down, the price begins to come to its senses, but it still has a good momentum for the movement on which you can ride. For half an hour, investors evaluate the essence of Apple’s presentation and come to the conclusion whether it is necessary to buy its shares or the new iPhone is so disgusting that it is better to get rid of them immediately. They often trade on disappointments.
Buy rumors, sell facts
At the same time, the release of negative news against strong positive expectations will lead to the fact that these expectations can simply “swallow” the news and the market will not notice it.
How the news works
4. Everyone is ready As a result, before the news, many investors have long bought what they wanted, and prices rose in advance. When the news comes out, for many it’s a light bulb: they have worked on an increase based on expectations and are ready to close the position at any time, even if the profit is slightly less. This explains what you often see. The important news comes out, and the market … almost does not respond, why? Because everyone who wanted to participate opened positions in a few more days. Therefore, the news outlet itself does not play a special role for them.
Sometimes it will take only a few hours to fall – there is a crushing sale. Finally, when the news is better than the forecast, everything becomes even more complicated, because many factors are connected. Usually the price continues to rise, but hesitantly, regularly rolling back when traders will exit the “long” positions, taking the profit