Why you need to stop trading the major news

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  • #394
    leobetts
    Participant

    News trading is often considered as the most difficult task in the retail trading industry. Many novice traders have blown up their entire trading account just by trying to trade the high impact news.  A major news release like interest rate change, unemployment data, etc. even has the potential to change the major trend of the market. After such a news release, the market becomes extremely volatile in nature and most of the time the inexperienced traders fail to deal with such market volatility. At the end of the day, they wipe out their entire trading account.

    Let’s learn more about high impact news and understand why you need to stop trading the major news.

    False spike

    Those who are trading the market for a long period of time know exactly what a false spike is. Most of the time the market exhibit big false spikes after a major news release. This wild movement is nothing but hunting the tight stop loss. You might be able to predict the price movement of the financial instrument with an extreme level of accuracy but due to such a false spike, you will lose the trade. In order to avoid such issues, you need to stay in the sidelines after the major economic announcement. However, if you still intend to trade the major news, make sure you trade with a wide stop loss. Give you trade enough space so that it can work out. Make sure you are not risking more than 1% of your account balance in any trade.

    Low success rate

    If you study a professional trader, you will know the importance of a conservative trading strategy. Even if you learn about the introducing broker program, you will be surprised to know the passionate traders are able to do better in such a program. Dealing with the high impact news has nothing to do with your passion. Most of the time you will be following an aggressive trading strategy to ride the market trend. At times, you might be able to make a huge profit from this market but considering the long term goals, you are most likely to blow up the trading account. The success rate is really low when it comes to trading the high impact news. So, it’s better to avoid trading the major news in order to protect your trading capital.

    Short term outcome

    News trading is often referred to as scalping among the professional trading community. The pro traders at Juno Market never encourage rookie traders to trade the major news. Developing your trading career based on short term goals is very risky. Try to create a long term vision so that you can easily make a profit and deal with your losing trades. Trading is more like your traditional business. You have to understand the risk factors of this business and trade the market with proper logic. Forget about short term income and focus on long term goals.

    Technical issues

    Those who are experienced in the retail trading business know the importance of trading the market with a high-end broker. During a high level of market volatility, it’s normal to experience heavy slippage with the average class broker. For this reason, the pro traders prefer brokers like Juno Markets to ensure premium trading environment. But having access to the best broker doesn’t give you immunity to minor slippage. This minor slippage can cost you a huge amount of money especially if you trade the market with big lots.

    So, in order to minimize your risk exposure, you must not trade the market at extreme condition. Let the market stabilize after the high impact news. Analyze the technical and fundamental parameters and see whether the trade setup is offering you a decent profit-taking the opportunity. If everything goes in your favor, execute the trade in a stable market without having any fear of heavy slippage.

    #635
    cathy
    Keymaster

    article posting in forum may block your account

    #21985
    morafen
    Member

    Kohl’s corporation is headquartered in Menomonee Falls, Wisconsin. It has recently been awarded as the largest food retailer store in the globe. myhr.kohls.com is currently operating around 1155 stores across 46 states of the United States of America.

    #55542
    RukLog
    Member

    On several occasions today, Ive counted how many people are reading this forum. On most of the occasions, it was over 50.

    My questions is, how come none of you are posting on here?

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