Avoid trading the high impact news release

This topic contains 1 reply, has 2 voices, and was last updated by Hoonzilla Hoonzilla 5 years ago.

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    The market of Forex is very volatile. Traders are always trading in this volatile market to make money. You should avoid some certain market movements in your trading if you want to be safe in your Forex. Most traders do not think of that and try to take the chance of every opportunity they got. One of these types of opportunity is trying to trade the market in the major news of events. In this time, the market is very volatile. Nobody knows where the market will go. It can also become stable if there is another news telling that the economy will come to peace and be stable. Until then, you do not know anything of the market movement.

    Some traders try to be brave and trade the market in this volatility to make money as the market movements are going mad. None of them are successful and only lost money in your trades. You should not trade when there is any major news event going on the market of Forex. If you look at professional traders then you will notice that every single one of them is trading the live assets after the dust settles down. As a full-time trader, you should never execute any trade prior to high impact data release for your own safety.

    Major news event can be catastrophic

    If you think you can make a fortune by trading the volatile market movement in the Forex, let us tell you something. There were many traders who thought the same thing and also placed their trades on these market movement. As the market is moving up and down, traders could not think if their trade is going to turn into profit or they are going to lose big time. All of them closed their trades on the market to keep money in their account by losing some unnecessary dollars from the market movement. It is better for you if you listen to their advice and do not trade in major events. The result can be catastrophic for your profits. If you have made 20 dollars profit in the last week and trying to make 100 dollars profit in today, because oil price has changed, you will lose 200 dollars in the market. This is how the market of Forex works and how every trader who wants to make money loses in major events of the economy.

    False spike during the high impact news release

    Most of the novice trader’s jump into the online trading world and they start trading the live assets without knowing the market details.They simply execute random trades and loses money in trading. Some of the aggressive traders in the forex trading industry start trading high lot size trade during the major economic news release to make a decent profit. It’s true that sometimes the brave steps will give you a huge amount of profit but in the long run, you will never become a profitable trader.

    The market tends to exhibit lots of false spikes during the extreme level of volatility. Professional traders are well aware of this fact and for this very reason, they stay in the sideline prior to the high impact news release. However, if you want to trade the news release then try to use the price action confirmation signal and do the technical analysis in the smaller time frame. And never risk more than 2 percent of your account capital in single trade while trading the volatile market.

    Conclusion: Forex market is very volatile. You need to wait for a stable market movement when there is no major news in the global economic world and you can place trades. The market will go at your expected trend and you can make a profit. If you place trades in major economic events, you will lose all of your profits.

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    The contrary view, of course, is that major news, positive or negative, creates movement in a market, and therefore opportunities.  If trailing stops are properly used to protect ones own position, there is no need to be fearful of significant news events.

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