Thursday December 29, 2016 - 11:49:25 GMT
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Amazing tips for news trading in the forex market
There are many forms of trading in the financial industry. If you become a professional forex trader then you will be using the technical analysis to execute your trade in the forex market to become profitable. And during the event of the major news releases, you will be trading the news. There are many novice traders who jump into the forex trading world for making a profit and incur a huge loss in the market since they don’t have précised knowledge about this industry. In order to become profitable in the forex industry, you must have strong basic about the forex market.
News trading is very much popular in the forex industry. During the event of the major economic news release, the market becomes extremely volatile and professional trader takes the advantage of the extremely volatile conditions of the market. But trading the news successfully requires an extreme level of skills and strong knowledge of the forex market. In this article, we will give you some useful tips how to trade the fundamental news release in the market
Technical analysis is the key to success: It’s true that the news trader often ignores the technical analysis in the forex market .But in order to trade the financial instrument properly you need to have a strong technical knowledge. Most of the rookie traders fail to make money by news trading only because they don’t know how to trade the market properly. Before you execute any order in the market by seeing the news data make sure that you take your trade in favor of the technical analysis. If your fundamental analysis doesn’t sync your technical analysis then don’t take the trade in the market.
Learn how to interpret the news: The forex market can be extremely deceptive for the rookie traders. As a professional news trader, you need to learn how to interpret the news data in the market. If you don’t know how to interpret the news data in the market then you will fail to make a profit by trading the news. Most of the professional trader spend a huge time in their fundamental analysis since they know news can be very much confusion at times. So if you truly want to become a professional news trader then you need to know how the data will react the market sentiment.
Major economic news release: Unless you truly have strong trading skills. We highly discourage you from trading heavy impact news in the market. The heavy impact news trading can be extremely difficult since the market exhibit lots of false spikes. So for a heavy impact news trader you need to know the overall performance of the country and make sure you are well aware of the long-term fundamental of the economy.
Combined approach: As a news trader you need to execute your order based on the technical analysis and the fundamental analysis. There are many traders who incur huge losses in the market only due to their lack of technical knowledge. Make sure that you have prepared your technical analysis result prior to the news release. Most of the time the market respect the key support and resistance level in the event of the economic news release. So try to execute your order sin the market at the key support and resistance level during the news release.
Consider your spread: Spread is extremely important for the news trader. Most of the rookie trader often ignores the fact of spread in news trading and end up losing money in the forex industry’s before you execute any order take a look at your spread. The spread becomes extremely wider on the event of the fundamental news release in the market. Make sure that your trade covers up the spread and give you decent profit in the market before you execute any order sin the market.
Trade the fact: There is a saying in the forex market that buy the rumor and sell the fact. So as a professional trader you must identify the rumor in the market. If you fail to do so then you will be always on the losing side during news trading. It is not necessary to execute your orders in the market right after the news rather should take your time until you are comfortable with price movement in the market.
Analysis the market sentiment: Market sentiment is extremely powerful tools in a news trading. Most of the professional news trader always analysis the market sentiment before they execute any order in the market. So before you take any trading decision try to gauge the market sentiment. Forex market tends to respect the market sentiment more than the fundamental and technical parameter. SO if you don’t know how to assess the market sentiment then new trading will not be profitable for you.
Summary: Trading the financial instrument can be extremely difficult especially if you are trading the news. Trading the news properly requires an extreme level of experience and sound knowledge about the forex market. Before you jump into the world of news trading make sure that you have a clear understanding of the forex market. Like any traders, you also need to have a valid trading strategy for news trading. Try to develop a strong trading strategy for the fundamental news release. Last but not the least always trade with proper risk management factors. Most of the professional traders are making money only by using the right risk management factors in the forex market. If you don’t have proper risk management factor then you will never succeed in this industry.
Article was written by Andrew Bezen – Professional Forex Trader
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