There are many types of forex traders in the today’s world. But all jumps into the world of trading only to make sure that they can secure a stable financial life. But most of the traders in the forex market fails to make money by trading since they don’t know how to trade the market properly. If you truly want to become profitable forex traders in today’s world then you need to have a clear understanding of the dynamics of the forex market. You need to get out of the popular context of forex trading that it’s a get rich quick scheme. Forex is just like any other business in the world. You need to have a valid trading strategy and you need to know very precisely what you are trading and why you trading. Those who are trading the forex market for a long period of time have undergone many hard steps in their life to achieve financial success in this industry. If you truly want to become a professional forex trader then you also need to spend a quality time in learning the art of trading. Out many different trading strategies news trading is very much popular among the rookie traders. Most of them trade the news in order to make quick money but end with up with a tragic loss. In this article, we will discuss some of the unique ways to pin out the market while trading the news.
Do your technical analysis: Most of the novice news traders thinks that trading the news doesn’t require any sort of technical analysis. But in order to make a decent profit by news trading, you need to have your technical parameters ready right in front of you. As a full-time professional trader, you must know that fundamental news release is nothing but the price driving catalyst in the forex market. On the event of a fundamental news release, the market tends to touch important levels before they rebound.SO if you trade the market without having any technical analysis then you will never be able to make a decent profit in the forex market. So before you start trading the news make sure that you know how to assess the market properly with your technical analysis skill. You should draw all the technical parameters in your trading chart and make sure that you execute your orders in the market on that levels. Most of the novice news traders fail to make money because they don’t know the perfect place to take any trade in the market.
Price action signal in the smaller time frame: If you want to become a professional news trader then you need to learn the art of price action trading strategy. The price action trading strategy is considered to be the most advanced professional way of trading the forex market in the world. Those who are trading the forex market for a long period of time use raw price data in the market to trade different financial assets in the market. It’s true that learning the art of price action trading strategy will seem little bit hard at the very beginning. But if you are truly committed to learning the art of news trading then you need to take that heat. Once you learn the art of price action trading strategy uses the smaller time frame in your trading platform to identify potential price action signal in the market prior to the news release. If you don’t find any potential price action signal before the news release then don’t worry just wait and see for price action signal in the market. Most of the profitable trades in news trading are taken after the news release in the market. And always make sure that you trading with the long-term prevailing trend in the market when you trade the news.
Use tight but logical stop out levels: Most of the rookie traders fails to make money by news trading since they don’t use perfect risk management factors in their trading. But if you trade the financial instrument then you need to make sure that every single trade that you execute in the market is based on proper risk management factors. So when you trade the news never risk more than 5 percent of your trading capital. If you are relatively new in news trading then you should stick to 2 percent rule in the market. So what happens if the first trade goes wrong or hit your stop loss? Don’t worry stay calm and wait for the second trading opportunity in the market. Once you find the second setup in the market take your trade with predefined stop loss and never used fixed percentage for risk assessment rather focus on price action signal. Your stop loss should be placed using price action confirmation signal in the market and you should execute your orders by scaling your lot size based on your lot size. And if both trades hits your potential stop loss in the market than leave the trading station and start the fresh trading day from tomorrow.
Summary: Trading the news is not an easy task rather it’s the job for the highly trained professional forex trader. But if you are still looking to be a news trader than make sure you know your technical levels in the market. And prior to the news release wait for price action confirmation signal to execute your orders in favor of the long-term prevailing trend in the market. No matter how reliable your setup is, never trade with the money that you can’t afford to lose and always use proper risk management factors.