I got a signal from technical analysis in a currency pair and I took a buy trade because fundamentals were strong enough for a good profit, now I was expecting It to move at least 100 pips before it takes resistance, and there is a news in next 3 days. How can I manage position in such situation, what if the news is not in favor of base currency and what happens? Will currency pair starts dropping or will it be a small pullback?
That is the great question , always have a stop that can keep you out of damage but enough to stay in the game. If looking at a 100 pip move trail it behind a 50ma should be enough to cope with noise
No way of telling. If its significant news or if you must have a tight stop-loss I would get out prior to the news announcement.
But won’t there be news every month, What strategies you use to hold a pair for positional trading in such situation?
Most news announcements don;t make much impact on a multi-day trade taken off D1 charts. But NFPR could be significant for all 8 major currencies. And what the ECB decides on interest rates will be significant for the EUR. Likewise the RBA for the AUD. Etc. etc. for the other currencies So best I think not to be in a trade featuring one of these currencies when its central bank is due to decide on interest rates.
For the rest of scheduled news announcements I ignore all of them. Remember that most bad news comes out of downtrends not uptrends. And most good news comes out of uptrends not downtrends.
In any case, it would be very very very rare for me to take a trade off forex D1 charts and still be holding 20 days later - plenty of time to make a profit and get out before a calendared news event.
There are many who don’t
this week cable - it was on an daily upward march in expectation of retail sales release today.
The numbers were a miss - last week I posted a link elsewhere which made it clear that these numbers would be a miss - the entire market was expecting a miss - it was telegraphed by the British Retail Consortium on the 9th Jan past.
As is very usual for GBP it rose it expectation of the miss (have mentioned that quite a few times in the past).
Anyways - here is the the headline in that link:
January 09, 2020
WORST YEAR ON RECORD FOR RETAIL (BRC)
And here is the result:
There is a new economic calender event almost every trading day of the month, how can I even trade with all the data coming in every day. Technical analysis alone won’t be enough to trade but with so much events, it’s hard for me to tell what event even affects and what don’t. It would help if someone could share their knowledge on this.
Start off with the central bank.
The BOE will announce rates on Jan30th - much of the news is focused around what they are likely to announce - e.g. retails sales, cpi etc
This is the main factor that forex market is the existence of the corona virus pandemic. Some of the senior most members have been affected by the virus hence living a serious gap that takes number of months to be filled. Some of the gaps are beyond restoration, though we are still in the process of restoring them.
There are several things that affect trading. It is believed that the trading is being affected by several factors that are unlimited. It is said that most forex trading are full of people who are brokers. It is very wong to loot money from the innocent beginners. This has been going on in many markets for sometimes and now a solution is already cooking.
Such situations are quite common because you cannot predict what will happen in the market. That’s why traders are suggested to use stop loss and take profit in all their trades. This works nearly every time for me and so there are none of my trades that go live without SL or TP.
Of course stop loss and take profit are very useful if we speak about risk management and money management as well. However I guess that sl and tp defense traders from losses, but also they restrict the maximum of your earnings, you know. Speaking about prediction, we are able to foresee the price movement with a help of various indicators, patterns which are the key part of technical analysis. Nevertheles, there is no 100% of chance to win and find such assets where you will have 100% of chance is impossible there are no such ones. But, prediction is possible at least a bit of prediction I think.