Swing trading & news

Hi there i want to know if news can make you problems if you want to hold a trade for 3-10 days?

It depends on the nature of news; there is nothing like fixed answer buddy!

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For such a holding period, which is common for me, I don’t normally do anything different even if I know some important news is on the calendar during that period. My stop will normally be at least 1 ATR20 away from price so a little excess volatility or wider spreads around the news should not shake me out.

Remember that not all news is bad. I am always in trades which follow the trend, and statistically, more good news (for your target) emerges during its uptrends, more bad news emerges during its downtrends. So news also has the potential to drive prices to suddenly accelerate in my direction. If this happens, and I get a sudden increase in unrealised gains, I often close the position asap at a good profit. This might not be the most efficient use of capital so if you can hold on longer and gain more, that is obviously preferred.

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thanks man im begginer so can you tell me what is ATR20?

ATR20 is the average true range calculated using the last 20 bars. It takes the difference between the day’s high and the day’s low over each of the past 20 days and calculates the average. The result rises when volatility goes up and falls when volatility goes down.

If your stop is 1ATR20 away from price, that means price would have to move more than the average that it moved over a whole trading day in the last 20 days in order to hit your stop. And of your stop was 2ATR20 away from price, price would have to move twice as far as it had moved over two average days in the last 20 days.

The idea is to make sure your stop is far enough away from price so that normal volatility does not hit the stop but it will be hit by excess volatility, which is what you want.

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thank you very much man. :handshake::handshake:

It simply means Average True Range of 20, you can apply it in your metatrader4, it is one of the indicators for technical analysis. It tells the current volatility of currency pairs

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I basically close my all trades during high voltage news session as like FOMC, NFP!

Are you using the daily and 4 hour time frames for your trades?

Thanks

@Zikiziki

The answer depends on how close your trailing stop is - as I think others here have alluded to

For me - and this also my favourite holding period I don’t need to keep abreast of the news when in a trade.

That even goes for the NFPs and Fed meetings - although I did get whipsawed on the last Jackson Hole meeting.

Interestingly enough these big news events can be great times to get into trades

Many reversals take place on daily charts after the NFP and Fed announcements.

If your a beginner my advice (if your swing trading) is to ignore news - but when you are more experienced maybe try to incorporate it into a more sophisticated strategy.

PS best place to begin your trading is on the daily timeframe - well done

Although I’ll probably be taken to task for saying that by the successful day traders on here!!

Just daily.