Novice traders do not really understand the importance of news. They keep trading the market without doing proper research and messing things up. On the other hand, elite traders always factor in the news and try to find reliable trading signals that support the trend. But do we really need to factor in news to make consistent profits?
In short, the answer is YES. Without knowing about the fundamentals of the market, you will never find the true direction of the trend. You will be constantly guessing and therefore often losing money.
So, how does the news affect our trading performance? To know the answers to these you have to read this article as we will be discussing the impact of headlines in the retail trade profession.
So, without delay, let’s get into the details.
Trend change
Everyone loves to trade with the main trend. Newbie traders always think that trend trading strategy is the most effective way to make money and they blindly follow this method. Even after the change in trend, they forgot to do proper data analysis and lost most of their capital.
But if you learn to analyze news factors, you can easily determine trend changes. For example, the minutes of a FOMC or NFP meeting can easily change the strength of the US dollar in the global economy. So, if you manage to understand the factors of the news, it won’t be a big problem to predict the direction of the trend based on the news data.
Surge in the market
Those who trade the market on lower time frames have to deal with a lot of fake spikes. Sometimes novice traders are often confused because they experience heavy slippage in the market. Spikes are very common but can avoid heavy slippage by using premium Saxo fx broker UAE.
Once you start trading with an advanced broker, you will be able to trade the headlines without experiencing major slippage. Now let’s look at the surge in the market. During a news release, you should never trade markets with tight stops.
If you do, you will often lose money and there is nothing you can do about it. So, to protect your trading capital, you should focus on long-term goals and trade in these markets immediately after news releases.
Great success
The big breakout in the Forex market happened right after the news release. Unless you have a good idea of the economic news calendar, you will never understand the proper way to spot breakout patterns in the market.
It may take some time to learn proper use of the economic calendar, but if you devote yourself, within a month, you will get the hang of it. Based on the hours of economic news releases, you should plan your trading in the market. Sometimes you may be confused about this market, but this is totally normal.
Stop taking trades without judging the news data and try to find out reliable trading signals news support. If possible, you can use a demo account to learn the process of breakout trading after a news release.
Optimize your risk factors
Those with strong fundamental analysis skills never take high risks in the market. They are well aware of the fact that the market is unpredictable. Based on the severity of the news, they always optimize their risk because it allows them to make decent profits without much difficulty.
You might think that managing risk exposure based on news hours is not that profitable. But once you learn the technique, you should be able to make significant progress and thus the profit factor will also increase. So try to integrate your risk management techniques with the news calendar to earn more money.
