How to trade the news in forex trading
Trading based on news, even if not enough can get you a strong position in the market. In order to achieve this you should follow:
1. News are structured into the level of impact. low, medium, high. Just like the word high, high impact news can change the trend of the market. changing a downtrend into an uptrend and vice versa. The medium impact news do have such capability too.
2. Upcoming important news should be followed weekly and daily. Attention should be paid upon which pair will the news affect.
3. If you are in a position and there will be an upcoming high impact news in 2hrs time you should take either half your profits first as the market will start going frenzy usually 2hrs before the news. Just shift your stop loss to breakeven. This way, if you are going long and the news impact reversed the market, you still got half your profits and broke even on the other half.
4. If you are not already in position before the news. wait for 10 minutes after the news is out before entering. As in the first 10 minutes, you will see price go spiking around and it happens a lot of time when once the news is out, price goes spiking up real fast. You will be there thinking if you don’t catch the boat now, you are going to miss a hell lots of pips and when you got in at the high, price went spiking even faster downwards.
if the trend is severe downtrend and a positive data comes the pair will spike high for 5 to 10 minutes. After that sellers would make use of that high and will make the pair go down again.
similarly opposite for uptrend.
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Trading based on news, even if not enough can get you a strong position in the market. In order to achieve this you should follow:
1. News are structured into the level of impact. low, medium, high. Just like the word high, high impact news can change the trend of the market. changing a downtrend into an uptrend and vice versa. The medium impact news do have such capability too.
2. Upcoming important news should be followed weekly and daily. Attention should be paid upon which pair will the news affect.
3. If you are in a position and there will be an upcoming high impact news in 2hrs time you should take either half your profits first as the market will start going frenzy usually 2hrs before the news. Just shift your stop loss to breakeven. This way, if you are going long and the news impact reversed the market, you still got half your profits and broke even on the other half.
4. If you are not already in position before the news. wait for 10 minutes after the news is out before entering. As in the first 10 minutes, you will see price go spiking around and it happens a lot of time when once the news is out, price goes spiking up real fast. You will be there thinking if you don’t catch the boat now, you are going to miss a hell lots of pips and when you got in at the high, price went spiking even faster downwards.