I am wondering how many people close trades around major news anouncements. If the SL is far away I can understand trades being left in but when the SL is vulnerable leaving the trade is surely a gamble. Also, if trades are well into profit I am thinking it would be a gamble not to take the profit before the announcement.
How do you manage your trade before the news?
Im no expert but I just want to share some of my thoughts and hopefully it helps what i usually do is open a trade set my SL and stick to it, no matter what news my come, adjusting your SL and TP can cost you some times and it did cost me an account once LOL:. I guess thats the reason why we keep on studying the market night and day trying to balance technicalities and fundamentals to understand and try to avoid loses
This is actually a good basic question and one that i see people get wrong a lot. As we know traders normally fall within two catagories, technical and fundamental. Fundamental traders will be busy studying the news and the perspective outcome to gain pips.
I am a technical trader (i.e i use charts and indicators) to base my trades on. For new traders i would advise to steer well clear of trading around major releases. I personally close out my trades, however i do sometimes break my own rules and if i have a trade which is in good profit i move my stoploss to either break even or even in to profit. Although, i normally wish i had just taken my profit.
I also see a lot of new traders that i work with totally ignor the news, it is VERY important to check the calendar every morning to see whats coming up and what to avoid. Some of my collegues make good money from trading news, it depends on you and your trading style. You can always see what news is going to affect the markets via forex factory.com, they even give predctions on how the peice of news in question normally affects the markets.
ok, thanks, 2 different ways of dealing with. I am leaning towards cancelling trades or moving SL right near to price action at the moment but time will tell.
I play the news, but today the $EURUSD couldn’t make up it’s mind and I had some pretty lose SL and still got stopped. It ended up in the “hey what do we do now” pattern.
I dont trade news. NFP and all fridays I try to avoid but if not just try to trail you stop to eliminate any risk and let it ride.
I’ve had some good success trading the news. One thing I do is remove all stop losses, may sound risky but there are often wild fluctuations proceeding the announcements and you can get stoppped out before the announcement comes out.
I have a rough idea of general concensus as this can mean less movement if result matches concensus but big movement if it is against concensus.
I have found sometimes if you get it worng you can still make money on the slightly delayed reaction. Today’s jobs report was a classic example. Result was 115,000 against expectations of 160,000 but a really bad result was expected. I sold AUDUSD and was surprised to see AUD rise after the announcement and futures alos improved for a few minutes. But I did not close the trade, this was tough as I was down a fair bit of money. But my logic told me this was a bad figure and that the markets would go down on this news. The initial reaction did prove to be only temporary (the initial upside from not being a )horror figure and meeting expectations) passed and AUD has been going down heavily ever since.
On other occasions I’ve go it wrong and had to manually stop out at a bad loss but once again looked at the result and decided the market is going to react stronger over time in the opposite direction to what I originally took. So I take that opposite position and it does start to move more and more on that direction and Ive ended up making more than my original loss.
I’m sure the above sounds risky and you can tell I am more a fundamental trader rather than a technical trader. But I’ve found it working for me and the opportunity is there to ride a very string trend even if you dont get it right the first time.
I ignore the news. As much as in sure I’ve lost pips from news, is about as much as I’m sure I’ve gained pipa as well. So I’m certain it’s more of less break even at one level or another as it hasn’t noticeably affected my edge in the market.