What are the most volatile news to trade?

What are the most volatile news to trade? Do you recommend me to operate them? They say it’s like a bet

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It’s very similar to gambling, because it’s a short dramatic event with an uncertain outcome. Major events to watch the economic calendar for are NFPR’s and central bank interest rate announcements, plus maybe inflation statistics etc.

Very often, if the market believes the news will be bullish, price rises towards the news announcement: if you wait for the announcement, this can mean you miss the majority of the price rise. In fact, sometimes when bullish news is expected and is then announced, price starts to fall, because now there is no more new bullish news expected and so traders close positions to protect their profits.

If you must trade news, you could always use a system of setting both a buy order and a sell order above and below the current price range

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But this is often a ticket to stop losses. Price often spikes on the news, retraces almost back to where it started and then moves in the real direction afterwards. If the news is obviously bullish/bearish then you can jump in, but often the data is very close to estimates and slightly better or worse doesn’t really change sentiment.

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I recommend you to avoid them.

News announcements are the one time that your stop loss may not be honored by your broker, simply because prices can move so fast that they’re unable to honor it.

The effect of that is that you think you have a stop loss, but in fact your only working stop loss is your whole account, down to margin call level.

That’s why trading the news is such a common cause of account losses.

It’s also a way for high leverage brokers to empty their customers’ accounts, and they make big profits that way, so it happens quite often.

It’s also why many prop firms allow news trading on their evaluations but then they prohibit it once you’re funded. They don’t really want people to qualify and get funded, but if they are actually funding people they don’t want to lose their own funds, that way.

The clues are all there. You just have to know what’s relevant, and how to interpret them. And that needs experience.

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Anything coloured in red on this calendar:

No, to leave them well alone. All the reasons are explained really clearly and simply and perhaps even aphoristically in the post just above. :grinning:

The key concept is that trading the news is essentially trading without a stop-loss, and combining that idea with a high-leverage broker is eventually suicidal. It’s not about “if,” it’s about “when”.

I remember when “MyForexFunds” regularly used to publish details of how their customers got on with news trading, and they always said that more than 50% of the customers who had a successful news-trade at their first attempt actually lost their accounts on their second attempt!! It’s both terrifying and ridiculous, isn’t it?! :sweat_smile: :grimacing:

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I have no experience but I was well warned never to try this because you can guess the direction right and still be stopped out by chart spikes, or you can try both directions and lose twice also! :unamused:

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I have tried this many many times and I have never gotten in right lol. IMO it’s straight gambling unless you have insider info

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I think it could be a risky business to just trade on a volatile news as it sounds like gambling. I would not recommend it. Though do you often do that?

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News trading is a risky shot. Rely on previous trends and figures.

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