Trading With News Strategy: Let’s Start With This Step!
News Strategy – When you use this technique in forex trading, you will basically compare the difference between the actual results of economic news with the predictions of the news. In general, when there is a big difference in value, consequently the price movement will be more drastic when compared with the difference in price that has little difference or in accordance with price movements. At this time we will explain to you all about what to consider when trading with news strategy.
3 Important Things to Look For When Applying News News Strategy
- The first factor relates to what kind of economic news is considered important by the market and has the potential to experience a large and drastic price movement. As the news gets more and more important, the price movement will also get bigger.
- The second factor relates to the actual and predicted value of the news. So the bigger the difference will be the greater the price movement that occurs.
- Next there is a daily range just before the news is announced. As the small daily range of the currencies is concerned, then price movements will be relatively large.
Techniques You Can Apply When Applying Forex Trading Techniques Based on News
1. Use Stop Buy and Stop Sell Order
Before a news is announced, you will use stop buy and stop sell pending orders. Goals and advantages when using this way is when the price moves are not in accordance with the prediction, you still have the potential to get a profit. Risk can be reduced by using a stop loss that will be tailored to the type of news. However, this way has a disadvantage when there is whipsaw or when the market moves irregularly in two different directions.
2.Trading Jump on Market Price When News Is Announced
This one way is done by comparing the difference between actual and predictive value of certain news. When the price difference is large enough, then trader will directly open buy or sell at market price. The benefit that you will get when applying this technique is to enable you to get a bigger profit from the first technique. The weakness when applying this technique is when the price movement is not in accordance with the forecast, then the loss will be quite large. This can happen because no stop loss is used to protect the value. When you will apply this technique, then you have an excellent source of news. In addition we strongly recommend for beginners not to apply this one way because of the risk.
7 Effective Steps You Can Do To Succeed Applying News Strategy Techniques
- The first step is to pay attention to news related to the currency that you are currently trading. Suppose you are trading on GBP / USD currency, then news relating to the UK and the United States you should pay close attention.
- The second step is that you should choose news that has a big impact only or often marked with red or unmarked.
- Don’t forget to check whether there is any other news related to the currency you are trading with which the actual results are in turn. If there is, then we strongly advise you not to trade in those hours because the movement is very large to be unexpected.
- When everything is valid, then this is the time you make a trade. However, do not immediately open a position when the news is announced, should you wait a while to open a position. We strongly recommend the wait action because when you immediately open a position when the news is announced, it is often the first movement false and deceptive. Not to mention orders made will be difficult because the busy market or quota of demand or supply that is not available in the market.
- Do not forget to always do Money Management control, because this is the key to success in trading in forex.
- Take Profit and Stop Loss also must be balanced, even if TP can be bigger than SL will be better. We strongly recommend that TP / SL be in the range of 30 pips to 100 pips, or when you are trading with a 5-digit system, TP / SL should be above 300 1000 pips.
- Finally, you also have to be careful ahead of Christmas and New Year in December and January. Because, in that period the market has a tendency difficult to predict.
Applying the techniques using news trading is actually very easy to do if you understand the way. Some steps that we convey are some tips that you can apply when going to apply news trading techniques when trading forex. We hope that the information we have presented above provides much enlightenment and knowledge to all of you who have read it. If from the explanation we have mentioned above there are less well understood and less clear. Please just ask us through the comments field below, we will be happy to answer any incoming questions for you all. Do not forget also to share this paper through social media you have for more and more people who know trading techniques with news strategy