While there are some times when news trading can be lucrative, it can also lead to massive losses. Listed below are three reasons not to trade forex during major news. You can learn more about forex news trading from this article. If you follow these tips, you ll be on your way to becoming a successful forex trader. You may have heard that currency markets can move by 100 pips in seconds, but it s true.
Forex is notorious for its extreme volatility, and it s no different on the forex market. During important news releases, volatility can skyrocket, and spreads will be higher than normal. This means that you ll need to be on your toes - even a small misstep can have disastrous consequences for your forex portfolio. To avoid this, you ll want to prepare and monitor major news releases with an economic calendar.
Typically, major news releases are the most volatile times to trade, but in some cases, they are welcomed with relative calm. This is because markets are reacted violently to news that is not immediately applicable to them. Even neat chart patterns can become out of whack during major trading announcements. If you want to make a trade during news releases, be sure to wait until the news event is over and before placing a stop-loss order.
While news trading is popular among many Forex traders, it s important to note that not all macroeconomic news releases have the same impact on the market. German Flash Manufacturing PMI has more impact on the Euro than French Flash Manufacturing PMI. You ll want to choose when to trade based on the news that matters most to you, and then act accordingly. You ll be much more likely to profit when the markets respond to such news.
A trading strategy that exploits forex news involves entering and exiting trades as the news breaks. While forex news trading can be a lucrative option, it also involves a high level of risk and volatility. You should ensure you have a well-defined strategy, clear risk management, and a strategy to capitalize on daily influences. The goal of forex news trading is to land on the right side of a major announcement. So be prepared to lose everything in the process.
Link to this article：https://www.360tradebay.com/26.html