News trading, some traders may avoid trading when there are fundamental news will be released. Trading when there's news release does have a much higher risk than trade at the normal time. Why?
When there is a news release, often followed by a spike or a stepping considerable price.
Fundamental News by category Big Impact, could cause spike 30 pips up over 100 pips in a matter of seconds. Currently this news the price speculators usually take advantage of opportunities to gain big profits in a short time.
Not only when the fundamental news in the release, a few minutes before the news is usually the price has also been volatile. Therefore, if you do not want a big loss, you should stay away from trade + - 15 minutes prior to the time the news release.
Some traders may have different ideas with other traders, they are waiting when the fundamental news will be released. They are only trading when there is any news, they are usually referred to as a news trader.
Their hope of course be a big profit in a short time, without having to observe the chart for hours.
Concept News Trading
How does the process of fundamental data releases news?
News Trading MethodPada There are basically two steps that passed in the news release.
First: Forecast analyzed the data posted for many days before the date of the news release.
Second: Actual data release on the scheduled date.
If the current news in the release, the data turned out to be different from the actual significant enough to forecast the data, this is where the fishing market reaction, often causing a sizable spike.
Deviation is the difference between the actual data with the forecast data. The greater the deviation, the market reaction will be even greater, which caused the price spike could be higher.
There are two kinds of deviation, ie positive deviation and negative deviation. Positive deviation is usually good news for the economy of a country, otherwise the negative deviation is an indicator of the country's economic decline.
Who need to know that positive news will not necessarily make the currency stronger, so did the negative news does not necessarily make a weaker currency. All depends on market response because the current price is the price speculation instantaneous news.
This fact makes trading news becomes easy.
Methods In News Trading
News Trader usually not long hold the position open, could only a few minutes sometimes even just a few seconds is close position.
1. Spike Trading
Trade conducted shortly after the data release. This method requires serenity, precise timing and speed of reaction.
That so the problem for Tading spike method is customarily frequent requotes the price because the price movement was very fast. Especially for market maker broker with Instant Execution order types.
2. Trade After Spike
Trading news this method requires a little patience. When there is a spike, not some time usually the price will retrace. When retrace these traders buy or sell orders in accordance with the direction of movement of the spike.
The problem with this method is if it retraces the price continues and does not turn back in the direction of the spike.
To adopt this method of trading news, traders should have knowledge about trading news in more depth and also an understanding of technical analysis.
3. Straddle Trading
News Trading method is done by opening the two pieces of pending orders shortly before the news release. In other words, traders open buy stop and sell stop above and below the current price. If there is a spike, one of the pending order will be executed, the rest of other pending orders directly remove.
News Trading SoftwareDengan this method requotes price less an issue. Problems arise if the prices before the release of news is already fluctuating. It could be pending order is executed before the news release.
For the selection of the type to be very important news, news berflutuasi where the price is already at the start should be avoided.
Alternatively use the special software trading news, with this software pending orders can be carried out automatically a few seconds before the fundamental news release.
By shortening the time between pending order with the data in the news release, the distance between the price of a pending order and the price at that time could be as small as possible. Pending orders in the final seconds far more profitable because avoid price fluctuations before the news release.
Besides news trading software can do 2 pending orders faster than the manual way, the software can also make closing or remove pending orders independently.
Some websites provide news calendar so easy for us to know when there will be news. You can check the schedule in forex factory news or DailyFX, this website provides news schedule of data is complete.
Some important data about the news schedule, among others; day and date of the news release, the release clock, currency news for what and how much effect that can be generated on the price of the currency.