For me, reading or listening to buiness or economic news is like reading the sports page of a newspaper. it’s already happened - it’s over.
A sports gambler cannot take any action on a game / match that’s finished…
similarly a trader cannot (should not?) make a trade decision on news that has already happened.
I follow the news out of general interest but never make a trade decision based on it.
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Hi.
Nope. Not saying that at all. It is POSSIBLE that your broker isn’t playing fair game that’s true. But even under normal market conditions and with an ANGELIC broker (like mine!!! LOL!!!) you will still have a hard time trading the news and making money consistently.
While we’re on this topic somebody quite rightly has mentioned that there is a difference between trading the news and trading news data releases. Very true. Let me give you some food for thought here. And in the below I am making the assumption that your broker is as honest as they come and there’s no market trying to take your money or anything like that.
So people want to trade news data releases. Great. I’ve already mentioned the possible caveats above. But be that as it may. We’ve not even touched on the trader’s own knowledge and skill at interpreting those numbers. So let’s say we’re all waiting patiently for a news data release. We already know what the estimated release is going to be. And the news data hits the wires. It’s a better than expected number. Wow. So we just jump in. Let’s assume that such better than expected number should move price up so we immediately jump in long (as I said: here we’re just assuming that everything else goes like clockwork with your broker and whatever else). All of a sudden price starts going down and you’re thinking but how is this possible??? Well: just because the number is better than expected doesn’t mean it’s a good number!!! See what I’m saying??? It doesn’t simply follow that a better than estimated number is simply going to push prices up. There’s no hard and fast formula for this. Only the people that really know what they’re doing (and they didn’t learn it on BabyPips School I assure you) can interpret those numbers. And even they get it wrong sometimes. All I’m saying is that if you’re going to try trade news data then be honest with yourself and ask yourself if you have the knowledge and experience to call the direction of price when the news data is released. Do you have the background to be able to actually interpret the news data. I know I don’t. But that’s just me. As I said: be honest with yourself when you answer the question.
Same thing as trading the news.
I’ve seen this so many times it’s not funny. Example: General Motors has a news conference and announces that they’re laying off 50 000 workers for whatever reason. Any sane and logical man (I include myself here) would think to themselves “uh oh: GM is in trouble so I’m going to short the stock”. Really??? Well: laying off those workers ACTUALLY saves the company costs. So the bottom line for the company and to shareholders is going to increase. What happens?? The stock goes up!!! Point I am trying to make here once again: there will be those that have the experience and the ability and the knowledge to make sense of the news and trade profitably accordingly. Can you honestly say that you are one of those people??? If so: by all means go ahead. I’m not one of them.
So I guess in closing here: all I’m saying is that there are better ways and surer ways of making money in this business than trading news or news data releases especially for a new trader. If you know what you’re talking about and understand all of these things then great. If not: it’s a crap shoot and nothing more. Don’t try to make money by trading stuff where the odds are stacked against you before you even start. The fact that the odds are stacked against you in trading OVERALL is enough. Don’t go looking to stack the odds against you even further.
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I don’t think that it’s a good idea for a total newbie to start trading the news right away. Trading the news is not just a matter of strategy, it’s a matter of having a good knowledge of the politics and economical circumstances that cause said news. That knowledge just takes time to accumulate.
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^^^ Exactly what I said (in 50 000 words or more!!! LOL!!!).
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Firstly, and @dpaterso and I consider each other friends, I have to say a few things.
Funda issues are tradeable. News is tradeable. Scheduled data is tradeable. BUT.
There are so many things to consider when trading using funda. Not just the news/data/issue itself. You have to look at the CONTEXT, both fundamental and technical. That makes it sooooo much more difficult. You need to have quite a bit of experience trying to trade using funda, to understand how and why funda moves markets.
As an example, API inventories for crude came out good early Thursday morning (I’m on GMT +8). Yet the DRAW at the EIA report later on started a short rally in oil. What’s the difference between API and EIA? EIA is an official US government agency while API is just an industry thinktank. But we still got a draw right not a build? OPEC+ will likely extend cuts. But Trump ■■■■ threatens global growth, plus moves toward electric vehicles. But China is threatening rare earths. Etc etc etc.
What do you do?
My experience. Newbies cannot consistently trade using funda. Stick to TA. BUT. Funda is a major tool if you put in the time and effort and risk to gain the proper experience. But you’ll probably lose. A lot. Using just funda. At first. But if and when you gain the necessary experience it can be a powerful tool in your arsenal.
P. S. I’m drunk so don’t belive in what I say.
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All said in one answer! i love this comment! congratulations
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So in the situation you just described, what would you do or which report will you base you decision on? Furthermore, can you briefly specify the news/news data that you usually make profits on and what margin of difference, between Actual and Consensus (Expected), informs your decision that a particular news will have great impact with respect to price movement?
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It depends on so many other factors. As I said, you need to look at the overall context of the market.
No, I can’t. It’s not as simple as seeing if the results were better or worse than consensus. Would be quite a lengthy post, and I’m not an expert in these things.
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Trading news is like dating a stripper, it’s exciting until your wallet goes missing … don’t believe anyone who tells you that they’re making a living day trading news … news are the most manipulated events in Forex business designed to fleece noobs… watch beginner’s video on YT by “no nonsense forex” … it’s the best channel right now that will teach you everything you need to know to trade! Good luck! 
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… @PaulMitchell24… So, so true… wasted 3 hours yesterday trying to trade the AUD Interest rate release… $5… and only just…
@clemmo, has a great critique of VP’s NNF YouTube series… Cheers
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If you need further proof go see an Australian dollar right now… shity GDP and it still trying to go up… lol
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Love the stripper analogy. Spot on. Been there, done that (and I don’t mean trading the news either), got the t-shirt!!! LOL!!!
Must say I stumbled across those videos and was pretty impressed myself. So much so that I posted links to one or two of them at least twice around here. First time in all these years that I actually understood what makes FOREX move and why simply because of the way he explains things. Of course what I got out of those that I did watch was totally different from others here I would imagine. Validated my beliefs as to why to NOT to trade FOREX. Also nice to see somebody that’s figured out the reasons why most indicators have absolutely no meaning in the FOREX world but are totally relevant when it comes to Equities and Commodities. You get the picture I’m sure. And I saw the thread reviewing his videos. Really thorough and nice work. OP went to a lot of effort which was really nice to see.
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Yep it’s very tough to forecast correctly
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not easy, but i think taking your analysis seriously and praying for favor can help
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Dear Cloudcharter;
no!
Imvestors come from every walk of life. There are liberals, conservatives, and people in between. Five people hear the sme news and you will see five different reactions. News should be considered as only one minor element in your trading decisions.
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Trading the news in real time is not advisable. I only use it as a basis for Fundamental Analysis.
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Its better to hedge your account when trading news or major data release. Switch to larger time frame (H4) and set a wide Stop loss and take profit on the nearest resistance (buy order) or support (sell order). Use a good reward to risk. You will be surprised to that your take profit will be hit in few minutes.
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Hi
Everyone tells you not to trade the news cause it’s not safe, Me personally I trade the news all the time and I’m only new to trading, I find it exciting.
There’s is one thing you need to know though, Never trade if you are emotional at any time.
You need to be clear headed and stick to your strategies, and be very disciplined this is very important, and never be greedy.
I like trading the news, it doesn’t always spike, but when it does and you know weather you want long or short it can be profitable, and you need to be quick :): I love it at least for me, I cannot speak for everyone.
By the way I need to tell you that I do everything that Learn to Trade has taught me not to do, but this seems to be working for me. There is so much that you don’t learn in the seminars and that they don’t teach you but there are certain things you’ll have to learn for yourself, If you can find someone to trade with it might be good to share and to get help from but make sure this person is level headed.
I trade on news and I minute trade and I like it it’s exhilarating for me. My Friend calls me a scalper now it’s kinda funny.
I have been taught by a very good friend of mine I have known him all my life and now we are trading partners.
Everything I have learnt is from him.
I hope this helps you
S
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If you know what you’re doing then what’s left to face is the broker’s operation.
It’s like all other aspects of trading. Some can’t and some can.
You need that sense of why things are where they’re at and what’s next.
You obviously need to have an edge in your study.
Trading the news is doable to an extent, then you’re left hoping the broker you use doesn’t get in the way.
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Excellent answers folks, only I can say is all ACTION cause REACTION, don’t trade the news itself ,better wait for the reaction or anticipate the action !
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