It is time to make money
Everybody wants to make money and the more, the better. People become traders in the hope of easy pickings and, as a result, it appears that it is hard work, requiring iron discipline and dedication for regular and stable income. The Forex market offers everyone an opportunity to make money, but far from always it is as easy as one, especially a beginner, would wish.
In my opinion, trading the news is the simplest type of trading, which will be suitable right for beginners and will help them to remain afloat without losing interest in the Forex market in general, long enough to naturally go into trading more deeply and to begin to understand it somehow.
And now you need to "no more than" figure out what news causes the biggest volatility when it is released, and to learn how to profit on this volatility.
We will talk exactly on this type of trading.
If you cut wood, do it with a sharp ax
It is a known fact that arrangement of stop-orders to buy and sell traded currency pair before the news release is one of the most popular strategies of trading the news and a fast transaction in one of the directions where the price will move when news are released.
Is this really so simply? At fist sight, yes, but let's consider this process in more details.
What are the key issues…
1. Generally, the speed of price movement at the moment of the news release is so much high, so that people are not physically able to respond to it timely and rightly. The price can immediately go down on 40-50 standard points in any direction and on the same amount of points back, catch both orders and stop-losses on them and leave you in the red just in few seconds! Therefore, firstly, it is necessary to know what news it is better to trade, secondly, you need to trade only with help of an automatic or manual Expert Advisor, meant for trading the news, which you can adjust the way you need. It will immediately delete the order that was not activated, set Stop Loss (particularly on the level of no-loss, as soon as at some time the price reaches the level of profit in few points), Take Profit and trawl your profit.
2. While you can somehow control the fast price movement with help of the adviser, there is one more uncontrolled factor as a broker, namely quality and speed of its execution of your set orders. Therefore, you need to choose right broker for trading the news. It should be a company with excellent long-term reputation. It is better to stay away from new companies with attractive advertisement and different bonuses. You should understand that all funds of any financial company are funds of the clients. And if such a company has a huge ad budget, you can be sure that one of the clients will not receive his money back.
3. It is also important to know, what type of accounts you need to use for trading the news. Standard accounts with fixed point spread are the most suitable. No ECN-accounts with Market Execution! Only Instant Execution! It will not guarantee you excess profit, but extended by news point spread (in my practice at the moment of the news release it run up to 40 standard points on ECN-accounts) will not annul your stops and slippage will be less, then on ECN. Yes, Instant Execution has a significant disadvantage in requotes, but it is better... Moreover, rightly adjusted Expert Advisor will cope with requotes.
4. There is one more interesting point. Some companies use carelessness of their clients – they provide such clauses, which will allow them with a clean conscience not to pay you money earned by trading the news. I was caught this way several times, so I know what I am writing about. It can be minimum time of transaction or maximum profit, or something else in the contract that will allow to scrap your profit. Usually, these things are neglected or ignored in expectation of trading after you have watched attractive advertising video or received recommendations from a friend-referral. In fact, if a person has already decided to sign up and begin to trade, he/she pays little attention to anything, till he/she gains his/her goal. But at this moment interim goal – registration and trade – predominates and the main goal – money earning and profit withdrawal – is forgotten. Therefore, it is necessary to read the contract and carefully pay attention to different “small details”.
Let's summarize
As you can see, even such a simple type of trading as trading the news requires good preparation and a lot of knowledge to be able to take from the market a piece of delicious money cake. Therefore, it is undeniable truth that you make the smartest investment when you invest in yourself, in your education and development.
Develop, study, invest in yourself and be sure that investments will pay off in full. I wish profit to everybody!
