Does News matter

[darren17]

Does news matter too much if you trade on higher timeframe such as Daily or H4. There are certain events were I stay away FOMC NFP etc but I find trading difficult enough to understand without including news. I work full time so only trade HTF.
Thanks

[Rickster99]

Depending on your trading style. If you’re a fundamental trader then news matter. If you’re trading a technical strategy then just keep trading it as normal and when you analyse your trades, see if you are losing when news comes out. If so, stop trading during news.

[dudebro]

Have you been to the School here at Babypips? They got this in a lesson, and a whole lot of other topics too.

Be Careful Trading the News

[J_C_Anderson]

Actually, news matter at any timeframe you may use. The main idea is that the news act as a catalyst - if they are important, they could cause trend movement. As usual, reaction on the news includes three main stages:

• elevated volatility during first few minutes (or sometimes even hours - it all depends on importance of news) - this is the period when most of the newbie traders try to enter the positions and got stopped out, while the professionals keep patience and wait,
• consolidation - the period when large player join the game after the analysis and start to form substantial positions in the direction of news,
• trend movement - when the situation is clear for the majority of market participants, they start to increase their position. When they move furher looking for additional liquidity, they cause price movement.

So, strong uptrend (or downtrend) appears when several large institutional players compete to get their position for the best price. The best solution for retail trader would be to avoid trading during the first volatile period and use this time to analyse the news and their possible impact to be able to enter the position during the period of consolidation. The main advantage of retail trader is speed - he can open and close positions in a seconds while large player would need days or sometimes weeks, so it is important to use this advantage in your favour.

[tommor]

The weight of evidence seems to be that bad news emerges most frequently within downtrends and good news emerges most frequently within uptrends.

Therefore the negative impacts from news would come from either being in counter-trend positions or letting volatility around a news release shake you out of a good position because the stop-loss was too tight. Or, getting out of good with-trend long-term positions prior to news announcements. I’m suggesting news isn’t a danger, its a poor strategy that fails to acknowledge newsflow which is harmful.

[darren17]

Thankyou for that , it was more like I was thinking. Alot of mentors would say that news is often factored in and unless it’s a major news item then on larger timeframes their should be little or no movement.

[Rickster99]

Yeah too many of these dodgy ‘mentors’ around.

[Aaronpp]

The currency market is particularly prone to short-term movements brought on by the release of economic news from both the U.S. and the rest of the world. If you want to trade news successfully in the FX market, key considerations to keep in mind are knowing which releases are expected when, which ones are most important given current economic conditions and, of course, how to trade based on this market-moving data. A variety of exotic options are available for traders who want to capture a breakout in volatility without having to face the risk of a reversal. Do your research and stay on top of economic news and you could reap the rewards.
These key points must be taken into account:
• Economic data tends to be one of the most important catalysts for short-term movements in the forex market.
• U.S. economic releases tend to have the most pronounced impact on the forex market.
• The most common way to trade forex on news is to look for a period of consolidation ahead of a big number and trade the breakout on the back of the number.
• A variety of exotic options are available for traders who want to capture a breakout in volatility without having to face the risk of a reversal

Lists the approximate times (EST) at which the most important economic releases for each of the following countries are published. These are also the times at which you should be paying extra attention to the markets:
Country Currency Time (EST)
U.S. USD 8:30 to 10 a.m.
Japan JPY 6:50 to 11:30 p.m.
Canada CAD 7 to 8:30 a.m.
U.K. GBP 2 to 4:30 a.m.
Italy EUR 3:45 to 5 a.m.
Germany EUR 2 to 6 a.m.
France EUR 2:45 to 4 a.m.
Switzerland CHF 1:45 to 5:30 a.m.
New Zealand NZD 4:45 to 9 p.m.
Australia AUD 5:30 to 7:30 p.m.
Times at which various countries release important economic new

[ontario]

Yes, sometimes they can leave protracted effects, it depends on magnitude of surprise and importance . If big money start to change their position you can see such movements in 1-2 days after a news release.

[alphahavoc]

News only matter if you know how that piece of news is correlated with the price direction. We must learn to compare the time of news release and direction of price movement. Collect and organize the same type of news release, group them together and place them in sequence as well as noting down the volatility and price direction after the news release. Only after an elaborated effort of close scrutiny, will we be able to understand how that piece of news matters.

Below is a chart from Pip Diddy weekly review. If one collects enough charts and discern enough, Eureka moment won’t be far off.

[darren17]

This is very helpfull I had no idea the data is released at particular times , I suppose it’s just k owing what effect it would ha e on the price action.
For example I’ve seen a sudden reaction to something like interest rates then an hour later the price action bounces back from a single bar. This is frustrating. This tends to knock me out even with a half decent stop loss.
How do you know what news will have what reaction .

[alphahavoc]

How do you know what news will have what reaction .

That is a dodgy question and a million dollar one.

1st and foremost you must understand that DURING high impact news release, high volatility are to be expected. What we don’t want is getting whipsawed by a knee jerk reaction, so we wait and observe the so called " price action " .

Let me give an example, we all know that GBP is seemingly forever weak due to unresolve brexit drama. That is not to say we just straddle a bearish trade indefinitely. We do have to pair it with other major currencies to trade. Say we pair it off with USD, and PREVIOUSLY a piece of positive expectation bullish high impact news push GBPUSD price southward, further assuming that there is no other high impact news release until the next 2 market session. Well, if the 1st hour candlestick during the high impact news close up, you would be wondering what’s going on. GBP is weak and USD strong, what the ‘F***’? Now this is a case of price in situation, profit taking in progress. But what if 1st hour candlestick close down sharply and after you put in a short trade, the next hour price reverse and start to rise… mean reversion?? Or whatever? and you start to sweat. Have you entered an appropriate reasonable lot size trade?

So how then? You would be wondering. And this is just ONE of the many mind boggling scenarios!

But have no worries, you have a highly accurate illusive methodology. You have been COLLECTING data of such high impact news for EONS. You know the market like the back of your BUTT. What does your private collection of charts and spreadsheet tells you?

Ultimately, is it up or down? You know. Up by how many pips or down by how many pips till the next market session open. You know. What is the daily ATR? You have annums of EXPERIENCEs. A seasoned veteran. Or would you not know? Then perhaps maybe you are not cut out to be a news trader after all?

Collect, observe, ask questions and answer your question. I can only point you the way. You must walk the path alone.

[Adolfson]

There is a suggested rule…Enter when the news happen… 15 min AFTER so you can catch the trend. Works for me… But i make before the news my technical analysis.

[AZV549]

Dear Sir/Ma,
I found this information to be useful for me as a newbies on this platform and i have a question to ask about the time particularly that… I Nigeria time please what are the chosen hours of time News do come out which can affect the Market movement.
Thanks

[dudebro]

Below is a chart from Pip Diddy weekly review. If one collects enough charts and discern enough, Eureka moment won’t be far off.

Now that’s cool. Thanks for sharing. Do you also do this on your own, collecting the dates and releases and tracking the moves of price?

[s.pellegrino]

I think 99% of the news like FOMC, create nothing but noise…my personal opinion is that trading news is just a waist of money…

[alphahavoc]

Now that’s cool. Thanks for sharing. Do you also do this on your own, collecting the dates and releases and tracking the moves of price?

Now, i only focus on the fundamental expectation in the future. Making attempt to pinpoint which Major currencies will be in the spotlight in the coming weeks, and decoding its directional bias.

[borosso]

If you want to be successful in this realm, you should use news as well as TA, because only in this case you will have some chance to win!

[dudebro]

So how then? You would be wondering. And this is just ONE of the many mind boggling scenarios!

This has happened to me so often I stopped trading around major releases. Of course I was trying to trade EURUSD around a lot of the Brexit stuff, which was a giant mistake.

If you want to be successful in this realm, you should use news as well as TA, because only in this case you will have some chance to win!

I think there are many successful traders on here that don’t trade any news and just price action. They might disagree with you.

[Greenish_Eric]

It matters depending of your trading style.