Follow up to that - some years back I remember a market analysts referring to news trading.
He likened it to an old guy getting out of the bath - quick time to get out, the water is draining.
He jumps with a start, ready to get out - but then slowly he sinks back in, then steadily, with effort, he makes it out.
Price makes it’s way to orders, so supposing that as a Euro buyer i had orders set ahead anticipating the news - but price moved leaving many orders unfilled - what happens to those?
If the fundamentals remain unchanged then those orders likewise - why pull them?
Where would I have put those orders?
Not where I put the demo order - that was just below the institutional 20 level.
Demo servers don’t have variable dynamic spreads. Today’s max spread on EurUsd was 4.9, Sundays open was 10 pips. Spreads widen due to liquidity providers pulling orders to reduce exposure to informed traders during risk events or when there is less liquidity due to less market makers trading during holidays or market open/closing.
Sometimes the price moves before the news because institutional traders guess what’s coming and act early.Some news only moves the price for a short time, and it goes back. Big surprises can move the price for days.I don’t trade right when the news comes out. I wait to see if the move is real, then follow the trend. It works better with a plan and good risk control
