Trading The News

Why trade the news?

The answer is just simple,  “To make more money!”

In all seriousness, news is a very essential part to the forex market for the reason that it has the possibility to make it move!

When news is released, particularly important news that everyone is viewing, you can practically assume to see some important movement. Your aim as a forex trader is to be on the right side of the move, however, the point that you know the market will most likely move, makes it an opportunity absolutely worth watching at.

Risk of Trading the News

As with any trading strategies, there are continuously possible risk that you should be mindful of.

Here are some of those risks:

For the reason that the forex market is very unstable during significant news events, many brokers broaden the spread during these times. This increases trading amount and could hurt your bottom line.

There is a possibility you could get “locked out” meaning that your trade could be performed at the right time, however,  may not show up in your trading position for a couple of minutes. This is not good  for you because you will not be able to make any adjustments if the trade moves against you!

Visualize thinking you didn’t get triggered, so you try to enter at market and  suddenly you realize that your original ordered got started! You will  be endangering double now!

You could also experience SLIPPAGE

Slippage happens when you wish to enter the market at a definite amount, however, due to the extreme unpredictability during these events, you really get occupied at a far different price.

Big market moves made by news events often do not move in one way. Frequently the market may start off flying in one way, only to be whipsawed back in the other direction. It can sometimes be a headache, trying to find the right direction

Profitable as it may be, trading the news is not as easy. It will take tons of practice, practice and you more practice! Above all, you must ALWAYS have a plan in place.

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