Trading the high impact news is a very challenging
task. The new traders love to trade the major news because it allows them to
make a huge profit within a very short period of time. As a currency trader,
you have to understand the fact that trading is all about managing your risk
exposure in the most efficient way. To trade the major news, you must work hard
and focus on long term goals. Once you set your goals, it will be really easy
to deal with the complex price movement in the event of high impact news.
In this article, we are going to discuss the five easy
steps which you need to follow in order to trade the major news. Let’s begin.
severity of the news
Most of the rookie traders don’t really understand the
severity of the news. For instance, they execute big lot trades during the CPI
data release. Such news is most likely to have a very minimal impact on the
market. So, the chances are very high that you will not make any profit. Some
even try to trade the market during the FOMC meeting minutes and blow up the trading account within a
very short period of time. You have to understand the fact that different news
events have different impacts.
Avoid trading the
Those who are new to the news trading profession is
most likely to trade the market during the press conference. This is such a
time when the market exhibits wild spikes. So, if you tend to make some real
progress make sure you are not trading press conferences like ECB meeting
minutes or FOMC. Stay in the sidelines and try to decipher the statement of the
leading officials. Once you have done the proper fundamental analysis, focus on
the technical data to execute your trades.
Trade with the best
In order to trade the high impact news, you must use
the best Forex trading account in the UK. Chose a broker like Saxo so you can
easily execute high-quality trades at any market condition without facing any great
trouble. Making a consistent profit in the long run is a very challenging task.
Unless you have access to a premium broker, you are most likely to lose a big
sum of money within a short period of time.
To trade the major news, you must analyze the Japanese
candlestick pattern. The new traders often things they know the details of the
Forex market and they can easily make a profit by trading the fundamental data.
But in reality, this is the most complex task in the trading business. The pro
traders prefer to trade the market using the Japanese candlestick pattern since it allows them to execute the trade
with a very tight stop.
Never risk more
than 1% of your account balance
The moment you start to trade the major news is the
very moment you risk a significant portion of your investment. As a new trader,
you should never risk more than 1% of your account balance in any trade. Always
remember, trading is all about managing the risk factors in the most efficient
way possible. You might have extensive experience in news trading but you can
still never say a certain trade will make profit. So, it’s always better to
trade the market after analyzing the risk factors. However, you can increase
the risk factors to 2% once you gain confidence in your trading performance.
Becoming a successful trader by trading the news is a
very challenging task. Unless you follow the basic rules of the investment
business, it won’t take much time to blow up the trading account. So, think
twice before you start to trade the major news. Make sure you never risk any
amount you can’t afford to lose.