Has anyone ever noticed how when you hear about trading the news, someone always tells you not to do it or its not reliable? I have been a news trader my entire trading career. I think it’s ironic that the same people that say not to do something as simple as trade the news are the same people that load a ton of indicators on their charts and give themselves headaches. I personally trade as my only source of income while I’m in school and honestly I will tell you don’t believe the myths that come have been made about trading the news.
The problem is most nvoice traders are interpreting the news wrong. When positive news comes out for the USD traders wonder why the eur/usd moves down. Or sometimes traders don’t utilize straddles. 9 times out of 10 you will notice the market will move in line with result of the news. This is something that you will have do yourself to actually know if it works. Don’t just not trade the news because you hear traders say so or you may have had one bad experience. Just like any strategy there’s going to be losses. But wouldn’t you much rather know when the information is coming out and if it’s good or bad for the economy? A lot of the time the market shows confluence right after releases.
The key is to focus on short term trades and fluctuations.I trade binary options when reading the news because I don’t have to worry about ridiculous spreads. Many traders don’t trade the news because of the spreads and the market doesn’t move enough in one direction for them to make a decent profit. I think many traders that claim to have years and years of experience, but ironically have not been successful or able to quit their day jobs are the ones that make trading hard. They don’t believe trading can be as simple as following the news. Simple always works best. I know this may not sit well with many technical analysis traders but at the end of the day you can’t knock it until you try it. I’m not asking you to take my word I’m just asking you open your mind and dumb things down a bit. Make your life easier and get back to your family and don’t let trading take over your life.
People that say news trading is not reliable are the same people that don’t understand that the news informs you about the economy and at the end of the day the fx market is about the overall economy.
Hi bwillz092
I recently opened an account with TopOption.com
I had some moderate success, trading 15 and 30 min with 30 and 50 euros, during NFP with GBP/USD.
However I am still down considering the initial deposit.
Can you give a simple example of a trade during the news ? (put/call,10-100,NFP,EUR/USD,etc) if you want of course.
Thanks.
When positive news comes out for a specific currency, this usually results in the currency going up. And visa versa if the news comes out negative, the currency usually reacts arccordingly. It’s crucial to not get confused. if the news is for the USD, then you should only be trading pairs like USD/JPY, USD/CAD etc… this will help you not get confused i.e. if you see positive news for the USD and you trade the EUR/USD up, the market will actually do the opposite because the Euro is against the USD, and the news informs that the USD is stronger than the EURO. So you would actually sell not buy. When news comes out for the EUR, you should only be trading EUR/USD, EUR/JPY, etc…
I took a screen shot of the news I traded today using MarketsWorld. I trust them because they are licenced and regulated and have a physical location that I can verify. Also they have never been accused of any fraud.
There is a thing with the binary options. The broker has 5 min before contract due time when is looking at its balance.
If the balance looks ok (broker is in profit) the software keeps all orders in the house. If not, the brokers’s software throws progressively a part of orders in the market to offset the price where it needs to be in profit, or at least close even. Sometimes, due to market pressure the brokers may throw even more orders than posted to avoid a big loss.
I can understand this. The only thing is that with Forex, I can do all crazy stuff with my orders but to close them for a loss. With binary options however, you have no chance at all if the odds are against. Is my observation right ?
Not quite…if your trading on anything other than Nadex or IG, your probably right. I stop trading with those scum bag bucket shop so called binary options brokers a long time ago. They are trading against you so ofcourse it’s on the house! But with nadex, it’s an exchange not a broker. So your orders are being filled by other human traders. And they don’t make money from your loss, only makee money from fees. They are linked with big banks so you don’t have to worry about not getting paid. I advise you drop the current broker you use and get into nadex man.
This is really interesting information, so thank you bwillz092 for sharing I have hobby traded indices, mainly ftse100 with spreadbetting and binaries, but the indices don’t seem to move quickly enough for binaries. Most brokers don’t seem to offer very short term bets on them either. Trading news with binaries appeals to me, so it looks like I need to do my homework on forex and specific news releases. Thanks again for sharing
Trading with news has some limitations. First one is slippages. It is hardly to notice on candlestick charts, but easy on tick data. So if you want to trade the news, first of all I recommend you to check slippages on this news for previous five years. But I strongly recommend to use tick data. Also you’ll notice that some currencies has smaller slippages then the others. Personally I noticed that eur/usd has smaller slippages then aud/usd. I believe that is because there are more traders at eur/usd then aud/usd due to fact that news for Australia happens during Asian session so there are more traders during European session with their orders, or with their grid of orders. Also from broker to broker you’ll notice different tick data. For example I compared dukascopy and alpari and fxcm and noticed that tick data shows at some brokers smaller slippages then at others.
I have hobby traded indices, mainly ftse100 with spreadbetting and binaries, but the indices don’t seem to move quickly enough for binaries. Most brokers don’t seem to offer very short term bets on them either. Trading news with binaries appeals to me, so it looks like I need to do my homework on forex and specific news releases. Thanks again for sharing