Going through the pipsology school, you eventually learn how to trade the news. They give a little example strategy one can use in order to profit off of announcement volatility. However, I feel as if they don’t answer a few questions.
(Here is the article for reference: How to Trade the News With a Directional Bias - BabyPips.com)
They say to look at what the price is doing 20 minutes before a news piece drops and see where the price is ranging. But, what if the price isnt ranging? What if it was trending downwards or upwards? Obviously you cant just take where the highs and lows are if its 50 pips wide. Also, why 20 minutes before hand? Why not 30? why do they look at the 15min timeframe and not the 10 or 5 or hour?
Im sure a lot of it is preference and based on how you want to trade it, but if they are going to give a detailed explanation on how to trade something, why would they leave out information on why they are doing some of the things they are doing? Even if at the end they said “This is just one way to do it, you can do it however you please”.
If anyone has an opinion or answers to any questions, please let me know! I’m very curious to get more insight. Thanks.
-Zhadow