Features of Trading on News
One common strategy in the foreign exchange market is trading on the news. This strategy is suitable for both professional traders and beginners, and with the right approach can bring quite a good stable profit. In this article you will learn about the peculiarities of trading in news in Forex market.
Technical features of strategy
1. Waiting for the news to come out saves you from the need to sit constantly in front of the charts and thus protect your nerves.
2. You can trade semi-automatically with pending orders.
3. Thanks to the fact that we wait in one direction, the market can be entered with a large lot (and, therefore, get a big profit from the deal).
Why it works?
One of the main factors influencing the movement of currency is the news of the world economy. Statistics of unemployment, inflation, gross domestic product or official performance are broadcast at a certain time in the news and are absolutely accessible to everyone, therefore, to traders.
After the latter are surprised with the news, there is such an explosion in the market - all of them begin to open positions in the same direction and, as a result, the currency falls sharply down or jumps.
Councils for practice
Before the release of important news (we watch them in the economic calendar), put stop loss in the open current position. Thanks to this, you will protect yourself from serious losses in case of a sharp jump in the trend. The distance from the current price should be significant, because in such situations there may be a "rocking" of the price. It can turn around at any moment and go exactly the direction we needed.
Don 't forget about manmade! It is necessary to calculate the size of the lot wisely, if you do not want, in case of loss, to stay with nothing at all.
You can also pay attention to the fact that now there are a lot of advisers. Including free ones that make life very easier for a trader trading on the news. Since there is no need to monitor the release time of the news, (the adviser will issue a delayed warrant or enter the market at the time you set). This software is also capable of accompanying the open position of the trailer with a foot. And monitor risk management if the market unfolds sharply after the news movement.
The strategy of trading on the news should be used carefully and only after you have already "packed your hand" in the demo account (as well as any other strategy). Calculate carefully the amount you can enter the market with and work on your emotionality. Practice shows that if you catch up, this trading system can bring a very good profit.