Are there specific strategies to operate with news or are it simply to quickly react to what happens in the market?
Are there specific strategies to operate with news or are it simply to quickly react to what happens in the market?
Yes, there are strategies to operate with news, but none is infallible.Some traders use "Straddle" strategies, where they place purchase and sale orders at the same time to try to capture the movement regardless of what direction it goes.Others prefer to wait a little after the news comes out to avoid the initial sudden movements and enter a more stable trend.Both have their risks.The problem is that the brokers often complicate things by increasing the Spreads or executing late orders, which can make you end up buying or selling at unfavorable prices.In addition, as I said before, volatility is so high that you cannot always predict where the market will go.Therefore, although there are strategies, none guarantees consistent results.You must try them in demo first.
Do you know what is the biggest problem of operating with news?It is not you, or your strategy, it is your broker.They can do what they want with your orders when things get hot.You can have a perfect strategy, but if your broker freezes its platform or expands the spread in 30 pips, no matter what you planned.It's like playing football with a leg tied.That is why many experienced traders prefer to stay away from the news or, at least, not depend exclusively on them.They know that the market is unpredictable enough on its own to add the chaos of the news and the "tricks" of the brokers.If you insist on operating news, be sure to do it with a reliable broker, because most will play against you.
If you really want to operate with news, I recommend a more passive strategy.Do not throw yourself into action just when the news comes out, wait a few minutes until the initial madness is calmed down.Many times, the market first has a great peak and then goes back, giving you a safer opportunity to enter.This approach may not give you the adrenaline of volatility, but it is much more stable and reduces the risk that the broker will block you or give you a bad execution.Another thing you can do is observe how the market behaves in similar previous events.Do they usually react in the same way every time the interest rate is announced?Or is it more unpredictable?Analyze historical patterns and it will be easier for you to make decisions based on real data, not only in heart.
Do not be fooled by those who sell you the idea that operating with news is the way to rapid success.Yes, there are traders who earn a lot of money at that time, but they do it because they have access to information or tools that you do not have.What for you is an opportunity full of uncertainty, for them it is a meticulous calculation.It is not a level playing field, and if you are not prepared, the news will do more damage than good.I would recommend that you approach your energy in other trading styles that are more predictable and less volatile.Yes, it is tempting to see how the market explodes in seconds, but those explosions may burn you.There is much more in trading to pursue each news post.Learn to read the market in your quiet moments and you will see that you can be equally profitable without so many shocks.
I understand that the news is risky, but I still think that with proper preparation, it could be a good opportunity.Maybe try a small account at first so as not to risk too much.
That is intelligent, trying a small account to minimize risks is a good idea.So you can learn how the market moves at that time and better understand the effects that the news has without putting a lot of capital.Do not expect results consisting of the beginning, you are likely to face several challenges with the execution of orders and volatility.The key is to adjust your strategy as you learn.However, care is still careful.Even with a small account, sudden movements can quickly eliminate your profits if you do not manage the risk well.Be sure to use Stops and don't get carried away by the emotion of the moment.As you have told you before, the most important thing is to have a clear plan and not depend only on the news to earn money.