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.
Analyze the 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 press conference
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 broker
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.
Analyze the candlestick pattern
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.
