How to trade forex on news release?
Hi to all experience forex traders…need your valuable advice on how to trade on fundamentals..especially on news and data releases.
Thanks.
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Tagged with: advice • experience • Forex Questions • news
Filed under: Forex News
What you’re looking at is akin to the gap opening in the stock market, or a news release on a stock. The whole world awaits these economic releases, and then it takes off.
Essentially, you’ve gots tens of thousands of people doing the same thing. For the novice, trading the actual release is a good way to get clobbered. But after about 5 minutes, it settles down to just regular trading. If it retraces more than half of the initial spike, you probably don’t want to mess with it. If it makes a new high or low, depending on the direction of the spike, go with it.
The problem with putting a Stop Entry Order in ahead of the release is that they will run those stops, no matter which direction it finally settles into. So you have to put your stops out there 40 or 50 pips to stay out of the way of the intial false surge. So you might as well wait and let the surges take their course, then jump in for the follow-thru.
Is there any reason you are opposed to technical trading, ie prices tell you the whole story. Everything you need to know to make a decision to trade is in the price.
Visit http://net-new.blogspot.com
Check out: www.ForexBastards.com. I’m also new to news trading FX. This site is very helpful on many levels.
If you’re looking to share ideas & experiances…… let me know.
The old adage, selll on news, buy on rumours. By the time the news comes out its too late. People have already priced it in. People are already trading on what is going to happen. So its near impossible to have the upper hand.
Prices at any given time reflect the opinions and views of many people, including the traders, businessman, big corporates, MNCs, Goverments, politicians and Central Banks.
If you trade on fundamentals, like Soros did in his famous Sterling debacle, or was it…anyway, be prepared to stick it out. It takes time for the market to adjust to the "big mac" valuation index.
Minute to miunute, or even hourly, or even daily trading its almost impossible to have the upper hand in trading base in news.
TO ME fundamantal trading is NOT trading on news…..Fundamental trading is when you know there is a discrepancy in valuation of 2 currencies due to short term price fluctuation becasue of weather or whatever. Say if Sterling was at 1.80 but your views or some analyst view is that becasue of whatever it sghould be 1.60. And if you hold to that "fundamental" view", then take a position in that direction.
I would suggest you to stay away from trading at news time as the market is very volatile…specially NFP (Non Farm Payroll) as you cannot guess market direction and sometimes your order may not get filled by brokers.
Get more info at -
http://the-forex-trading.blogspot.com