I would like to hear opinions from traders (preferably with significant experience) about how long before major news announcements I should be closing my positions. I have been thinking long and hard about this and need to arrive at a decision. In a course that I did it was recommended to close all positions about 4 hours before major announcements. Is there a particular reason why I should allow such a big amount of time? I know markets can go flat before news releases (although from what I can see not always) but are there other reasons?
Can markets go super-volatile BEFORE the announcement based on rumours or there is no such thing?
Risk management is my top priority but isn’t 4 hours a bit too much?
Also, how long after announcements do you resume trading? Is it just the matter of watching the charts and seeing when volatility has settled?
It depends upon the nature of the announcements and if you want to trade them. Look at the calendar to identify news which applies to your positions, look at the expected value and the previous value. If CPI is expected at 5%, however, was previously 2%, is the projected figure a positive fundamental based on your positions direction? If it, hold the position and wait to see what the news is. If the report is better or equal to the expected figure, then there is no need for concern, and it will move the market further into profit, if the figure is worse close the position, make sure you set a tight stop-loss incase the market goes against you. it is riskier than trading absent any news release, however, it could work in your favor
I close or protect my positions 5 minutes before the news. If I am deep in the money or not very concerned with the announcement I sometimes take a risk and stay in.
If you are a day trader, it is better not to trade on big news release date. Suppose you open a trade and before news your position is in loss. You system says it will hit tp but due to news you can’t hold the position because a spike in price can hit your SL. And if you are sure enough that you will be able to get out of the trade with profit before news, that’s different.
Wesley Espinosa Nov 2010
Money
The winding never-ending road begins in the forest
The root of all evil is an exchange of nature’s breath
The root of all evil isn’t born in any sense
The root of all evil begins with a death
The carcass is driven to its’ after-life
It’s given a new face and a new shade of green
Most of it won’t make it to hell, every day it’s shredded
There is no reminder that what it is, isn’t what it seems
Each and every piece that makes it, starts in the same place
In this place it is still meaningless until claimed
It is then transferred for some purpose
Could be violence, could be music, could be life….
It continues on this-never ending path
The stock broker to get coffee
The coffee worker to get burgers
The burger griller to eat bread
The baker to ride a skateboard
The skateboarder to smoke pot
The drug dealer to get a weapon
The gun shop owner to have sex
The prostitute to keep living
The pharmacist to play the market
The stock broker to….
We’ve reached the beginning again.
The root of all evil is our fuel to survive
Our fuel to achieve, our fuel to happiness, our fuel to wrath
So when does this stop and what happens when it dies
The root of all evil begins with a death, it’s a never ending path
This belongs to Wesley Espinosa.
