Example for unexpected news today and the consequences:
Today i did not trade because i had some money left, but in the afternoon i took a short glance on my mobile on the markets. EUR/USD up-moove at 16:27 hrs jumped immediately into my eyes.
Normaly such sudden price mooves are news- driven, so i was curious what happened that time and checked news pages.
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You see no scheduled news at that point of time, so i suppose maybe:
1.FOMC member mentioned something
2.Release of very bad U.S. company earnings
3.Sudden message to new China trade war drawdowns
4.Anything else not scheduled but good for EUR and bad for Greenback
I had time to check out the reason- in the same minute 17:27 GBP/USD and EUR/USD shot up, so it is clear that the only reason can be one of these positiv brexit news.
Brexit negotiations now present an extreme high risk situation for GBP trades. Ordinarily, good news emerges during uptrends, in a series of anticipated positive events (vice versa for bad news in downtrends). Its fine to join such a trend once its established and running consistently.
But higher price doesn’t automatically make an uptrend. If price rockets within minutes following some tweet by a journalist, it can fall just as hard and just as fast. Don’t get sucked into chasing price.
True. And also sometimes the pace falls down a bit, I expect a minor correction to happen, yet the price picks up the pace again and skyrockets. These kinds of events are not for a beginner like me.
Yes, happens with me as well. Check the important and relevant news only, every news bit is not to be seen. Also, it is suggested to not depend on news entirely, keep your technicals strong, as well
Just because it fits here- this afternoon was the impeachement vote against Trump-so this was an event ready to be traded .Accidentialy i turned on CNN 10 minutes prior to the vote and realized that, so i waited. After the positive vote i went EUR long, scalped small profit.
I think thats a typical example, how news-trading works.
Last weekend it became clear from news that the Uk asked for a Brexit extension - in fact it was possible to view the request on-line before Monday market open.
That was pound positive news so guess what happened the pound on Monday morning.
Then later in the week it became clear from news that an election would happen. Opinion polls have long been signalling that the ruling party have a huge lead and it happens that the same ruling party negotiated deal witn the EU (pound positive).
So guess what happened to the pound on news of the election.
Thats exactly what i would call a “penalty” (from soccer), if these kinds of news are in the air. I think the next interesting event is the UK election itself- all opinion polls say, that the conservatives are far ahead-on the other side i cant believe, that the Brits are realy 100% in love with them after this Brexit comedy. Stronger than expected socialists will drive down the pound immediatly-if that turns out during the next weeks,its again an oportunity to make money.
