I have a question for experienced traders. For a trader who likes to stay away during news, if he/she opened a trade say 6-8 hr before an important news/speech, is it prudent to exit half hr before the events takes place or not to trade at all on that day? Assuming the trader is 4hr and daily trader and not a fanatic about anything.
Let’s assume that trader is you, because I am talking to you. Seeing you had to ask the question, it is better you stay away. Trading has to be filled with certainty and confidence in the position taken and in the methodology itself. Why would you want to risk your money on something you don’t feel reasonably certain about.
I can tell you that this Friday before the NFP news comes out I will be in a trade, and still be in the same trade after the announcement. That is unless my TP is hit during the news.
Let’s get to some facts about the news. News only creates spikes in the price movement. If you are able to discern the cycle of the movement you are in, and whether it is a trend, or a correction, or a correction within a correction within the larger scope of the trend, then you can make an educated trading decision (not guess) based on your data.
The best thing I can advise is to demo trade. Demo trade all the setups and questions you could possibly have. You might bankrupt a few demo accounts, but that is okay. There is an unlimited amount of demo dollars waiting for you. The nice thing is once you perfect a methodology that is perfect for you, then there will be an unlimited amount of real dollars waiting for you.
Please, I ask you to take the entire content of this post as honest and constructive.
Not really, i used technical and fundamentals and they not overlap each other. If you are a breakout trader maybe fundamentals suits you but not always and if you are a rank trader well you are at your own device. The most important fundamental is Interest Rate desicion. But some fundamentals make the currency jump for several pips but it might last just a few seconds, other fundamentals makes jump like 800 pips or more but it won’t happen from one day to another, those 800 pips can be climbed after a week. If a natural desaster occurs well, those 800 pill will jump in matters of minutes.
My advice to you is to use simple price action, that is better than technical or fundamental, it is both at the same time. You wanna see the car running but you don’t care how the engine works as long it works propperly.
Regards.
What it really comes down to is that if that is your expereince and you are good at it, then that would also coincide with your bias.
My bias comes from being in a trade every month this year when the NFP news hit, and I have done very well on those trades. Simply put, if it spiked in my favor, it hits my TP. If it spiked against, then I’m patient, because it will turn around. As far as the FOMC is concerned, it is basically the same concept.
They always say the “proof is in the pudding”, so I posted some. The candle with the oval around it is the hourly candle. That candle hit what I call me WS2, which is the 2nd weekly support, which comes from my proprietary set of S&R’s. On the 4-hour chart, it shows price action hit the bottom of the 4-hour chart perfectly, and that was while the news was being announced. That was the spike against my position. I entered at 1.6201, and it moved to 1.6185. During the news, it bounced off the bottom of the cloud. The volume of the move was enough to push the candle on the hourly through the bottom of the cloud and through theo ther side, which is where I took profit. It was around 1.6425 that my TP was at, and it was hit.
The entry had nothing to do with the news, but everything with the setup as it pertains to my technical only methodology.
Also, if you trade using FA’s, don’t mistaken this for knocking it. After all, if you ar amking money with your trading, that is what counts.
I think, its better that you stay away from it. Its alright that you leave the place half an hour before it starts and not attend at all.
For me that is a key point that too often gets lost in the various debates on here. There are many ways to trade Forex successfully, and we are all of us suited to some more than others, but given that the aim of the game is to make money, then anything that makes money for the individual consistently over a period of time is the right approach for them. There is no one right way to approach Forex, just a few themes common to most of the successful approaches (money management etc.).
So while the discussions often give enormously helpful food for thought, we will often not arrive at a consensus, as people who disagree can both be right!
And to answer the OP, personally I do not trade news, although if I will hold trades through a news announcement if I am trading a big enough move that I believe my underlying analysis will hold good (quite apart from anything else, I would hope that I had taken the upcoming news announcement into account when placing the trade in the first place). So I will not take a trade targeting 20 pips half an hour ahead of a major announcement, but I will happily enter a trade with a 2-300 pip target early in the week and hold it through that week’s news announcements until my TP is hit. In my case, a news announcement would never be a reason to enter a trade, I simply have it at the back of my mind when making my technical analysis.
As with all these things, I think that it becomes instinctive with increased experience.
ST
I use Kipas strategy which is BreakOut system and this strategy is for Fundamental.
Not every news give big impacts, but news give profit and the end…
happy trading
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This is such an irony. I’m a “black and white, no gray area” , “a spade is a spade” type of person. But when it comes to trading no way is right or wrong, except what is right or wrong for the individual.
I made the following quote in my Weekly Forecast on my blog, “the daily cloud at 1.0651 should contain any move south.” The dip was exactly 1.0651. This is why I say the news creates spikes, but is still contained within its technical parameters. The containment level on top was is the peak of the SD channel which shows an extreme reading on the daily for this pair.
Seline, I believe it is in the methodology and not a set of stereotypes to determine positioning when it comes to the news. This was a trade I had that was entered before the news hit at that red line, which is what I call my WP at .9582 (Based on a proprietary formula I use to figure my own S&R’s). It did pull back on my slightly, and I exited at the bottom of the cloud, so I left some pips on the table. Nevertheless, it was a very nice and forceful move at news time, which bagged me a nice bunch of pips in a short period of time. Another thing to consider here is that momentum was waning at key extreme levels and near key support levels. That is a very nice confluence of indications for a strong thrust north.
I think that not all news move the market, so when you trying to play on news you spend a lot of time to read it, to analyse it, better to use technical analyse to find the way of market, but of course sometimes the price can changes by news, be careful and use all your instruments!