Hi, I understand in Forex how much the news plays a role, but am confused on how to incorporate it into a strategy and if I should be using this as a tool often. Like where is a good platform to receive your news from and how does one use it to search for pairs or to look for trends? If you guys have any recommendations and say how you guys incorporate this in your own experience would be helpful as well. Thank you.
The classic approach is to avoid opening or holding a position across a major relevant news release. So if you’re a stock trader, you avoid buying the shares ahead of the annual or interim results release. If you’re a forex trader, you avoid a USD position across NFPR’s or any currency when its central bank is making an interest rate decision.
Its so hard to correctly predict, analyse and quantify the impact of significant news in advance that many regard it as gambling and avoid it.
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Mark Douglas wrote a book called Trading in the Zone.
The Zone is a vague description of where or how a person can get a sense of what may lie up ahead, it’s not an easy thing to describe but you do get a sense of this by reading and understanding current events - most often via ‘news’.
Let’s say in normal times you are trading GBP and the Retail Sales numbers for UK are going to be released the following morning at perhaps 09.30.
You know that these numbers will impact on price if they are healthy (better than expected) because maybe news of late could have been negative and perhaps talk of rates cuts.
Your reasoning would be that a jump in sales would ease pressure for the CB to cut etc etc.
Two ways to trade this - first is to just wait and see what happens price or you could head over to the British Retail Consortium site and see what numbers they have reported for the same month (they always are a week ahead of the market).
Just one example 
Here is me posting info about risk at the end of Jan
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Some time ago I got curious whether I could spot news and report days on a price chart. At the time I was coming up to speed with price action analysis and I wanted to see if I could spot anomalies in price movements, not in line with PA, just before, during and after news and reports. I examined the 4H, 1H and 15M charts for several pairs going back a full year. Guess what? I could not find a single anomalous price movement. What I did find is that on certain days price movements are accelerated and these accelerations correspond to news and report timings.
I would encourage you to test and verify everything you know or hear about the market and trading. We tend to regurgitate what others say without validating it. I’m guilty of that too.
I have found that price follows a set of precise rules. It’s our job as PA traders to identify as many of those rules as we possibly can. The more rules you identify the more efficiently you will be able to trade. Having made that observation and validated it, I now ignore news and reports entirely. Exceptions are massive events such as tsunamis and such where price generally falls off a cliff.
Keep things simple and don’t look to overcomplicate your trading. You will be much better off. And, don’t take my word for all of the above; validate it for yourself.
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Here is a live example - you can see the platform, the chart shows how to trade it.
Common rule is do not chase
There is a guy in fxstreet - forget his name - who is big into supply/demand - anyways i remember a few years back he was reminiscing about his time as a teller - he had 2 little wooden blocks with wire spikes, one for the buys above price and one for the sells below.
Suddenly some news hit the wires (before internet) and whoosh price left half the buys behind - there they were still sitting on the little block - but those orders never chased - most were now behind price - but they remained on the spike.
It was a good wee story although told years ago played out yesterday/today:
And how WTI reacted:
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Hi, trading fundamentals takes a lot of time and energy. You need good knowledge of all data released and how they affect the market and how they affect sentiment. On top of that is all tweets and sudden news reports. This requires constant ears on the news.
There are lots of platforms that can help eg Bloomberg, Reuters, investing.com, fxstreet, dailyfx etc. Youd have to go through all of them and have the live news tab open at all times to get the news quick eg trumps tweet on Saudi prince and how it affected oil. You then have to trade it and likelihood is you’ve missed the initial move as most professionals have a live squawk box shouting out news.
Personally I do not use news or fundamentals to trade on. Generally if the market is selling off because of bad news then I’ll just look for sell trades but I’m not trading data releases.
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https://insights.globalprime.com/daily-edge/
Ivan Delgado
The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime.
This guy explain the fundamentals of price action on a daily basis in an extremely clear manner.
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Now that the close is over time to have a wee think about my chart above with it’s fib and fundies attached.
Back to the zone - imagine this, a trader was only aware of the chart, so he/she spots the move up with the big candle. As the candle closes the wick is apparent - so he is taught that this is ‘rejection’ of price. He quickly zooms out to a hr1 - that rejection happened exactly at a previous support on 9th March - right to the pip - support turned resistance - sell sell sell.
The assumption is that price ‘ran into sellers’ - have seen that comment many times.
The market is not like this, the charts record price, but price is the outcome of the market.
A friend is big into auctions - that’s where he sells his products.
Sullen face he will sometimes comment - not a good day today - weather was bad - few people, prices were bad.
So what about the wick and rejection?
Think again about the teller - the unfilled orders sat on the spike unmoved by price - they were going nowhere.
The auctioneer called price up as far as he could, but he ran out of bidders - the only thing he could do was to bring price back down to where he knew the buyers had been.
One thing that the auctioneer knew - the value of the product was as good as it was down there (the news value remained as was)
Perhaps none of this makes much sense so I’ll leave with the updated chart of wti with it’s wicks - the President’s tweet is what counted - up from my last chart 26.47 to 28.58
I think knowing the fundamentals well, helps a lot while trading. Atleast I make sure that I am well updated with the news.