Many Forex traders prefer to trade by relying on Forex news
Where they usually check the economic agenda to identify the dates of the announcement of key economic data such as non-farm payroll report, and willingness to carry out foreign exchange trading in the forex market linked either before the announcement or shortly after the announcement.
Of course, if something unexpected happens and they are told in a timely manner, they can also trade accordingly. There are a few different ways that are commonly used in Forex trading. We will take a look at it and learn about the pros and cons of each, before we finally reach conclusions.
Expect results and trade before the announcement
This may be a bit stupid, depending on your expectations. For example, if you think after analyzing the economic data and the records of the associated figures, that the Reserve Bank of Australia will definitely cut interest rates tomorrow, while the market thinks this is unlikely at all, then you may have a reason Enough to open a short trade on the AUD. Otherwise, you will be a liar, with the odds against you already more than 50%.
The advantage of taking a smart position ahead of the announcement of market news in influencing the Forex market is that you might get a very good price for trading in currencies, without high spread or any slip. The negative side of Forex news is that you may experience a period of high volatility within the minutes that may precede the announcement, which either will make the price reach your stop loss point, or make sure that you will need a large stop loss point for Make sure that your trading continues, which reduces the probability of risk rate of return.
Forex News and trading as soon as possible
This is very logical
you have to make sure what the market is expecting, and the moment you see or go beyond that expectation, open the trade. This will probably not work at all, for a number of reasons: liquidity will be very low, there will be major glitches that are likely to occur, the spread will be very high, and the broker you are dealing with may not be able to actually give you the price you want. Normally, while individual traders are able to enter the market after the release of key market news, the price is very weak. This may not matter if the event is very impressive, such as the payroll report in non-US agricultural sectors, but it will be important in all other cases.
This method is always fairly weak.
Open pending orders ahead of the announcement
It may be wise to wait first until major market reports such as the Non Farm Payrolls Report or the FOMC Committee Minutes have been announced. Immediately prior to the announcement, you place pending orders with the broker for 50 pips You will sell 50 points below. In fact, this is a very bad idea, because liquidity will become very weak in the past and next seconds for major announcements in the markets so that prices and spreads may be at high levels. Where you can easily find your trades open in a second or two, which is not a good thing at all.
Even if you are right, there is a possibility that you may have a big slip on initial trading if the results are strong.
Wait for the market to absorb the ad
This method requires some discipline, serious mental work and market analysis, but it is the only way to handle news. You should compare the outcome of the news announcement with market expectations and decide whether Forex news has really led to a major change in the market sentiment of that currency. When you make this decision, you should wait a few minutes and see how the price will move afterwards.
Your logic should be as follows: If the market news changes expectations to be more bullish, and the price is moving strongly upward, then wait for the decline and then enter into a long trading. If the news is very bullish but does not change the basic expectations, which is a more likely outcome, and the price is moving very upward, wait for the decline and enter in reverse trading immediately.
This method avoids problems of slippage and poor liquidity, as well as widespread spreads and poor operational.
The secret of trading is through Forex News and Reap Profits
The following is a small secret about trading forex news: Most times, news does not change market movement, but it only accelerates. When combined with the fact that the market tends to fluctuate most of the time, especially after a sharp move in a certain direction, you will realize that most of the trading opportunities in the news are in circulation against the initial movement, rather than the expected follow-up.
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