Hi everyone,
Last Thursday there was high impact news situation (Sell) - Please see my screenshot below,
At the moment my y focus is on XAUUSD pair.
There is a good resource for me to better understand the calendar and how to interpret the high impact news if it will be a SELL or BUY position, etc.?
Many thanks,
Michael
Note that you can’t always predict the direction of the market with the fundamentals; i have seen instances where a price in an uptrend on account of the news which was good had a downward spike that left majority in surprise.
And for your understanding of the news, you can always check www.forexfactory.com
The Red means High Impacts News (they’re very likely to have huge impacts on the price)
The Orange means Medium Impacts News (they’re likely to have impacts on the price but not huge)
The Yellow means Low Impacts News (they’re less likely to have impacts on the price, in most cases no impacts)
The Ash means holidays/breaks whichever you call it
Warm Regards,
Ayọ.
Unfortunately, there is no straight forward answer when it comes to trading the high impact news. It is a good gauge for long term investor maybe. But to trade by interpreting the news meaning, is not easy task.
Please go study the latest previous NFP, end of September if I am not mistaken. The news were good, price shows some USD strength when the news was released but faded after that.
It’s rare for news to reverse a consistent established long-term trend. I did some work a few years back to see the worst 1-day price falls registered in recent times on the Dow Jones. In 70-75% of cases price was already in a downtrend.
But it’s almost guaranteed that high impact news will cause brokers’ spreads to widen so far that every pending order will be triggered, whether it’s a buy or a sell. And then every stop-loss to be triggered, whether it’s a sell or a buy. Many times I have got the direction right with an entry order only for the entry and stop-loss orders to be triggered in quick succession by wide spreads on news.
exactly so
it’s very easy indeed to get the direction right and still lose money
be very, very aware that these are the exact times your stop-loss may not be honored by the broker, so your true risk may be huge, compared with what you calculated and imagined it would be
“trading the news” is by far the commonest reason for margin-calls and account losses
