"avoid trading before/during release of the news"

agazio

Trader
Aug 7, 2023
23
5
9
first of all, thanks to the owners for all the informations, indicators and EAs provided. We owe you a lot. Other websites provide free material but not of the same quality.

regarding my question, you know that:

1- BEFORE the high impact news the market is flat, even for days, waiting for the news

2- DURING the release of the news the market is nervous, trading is riskier (can also give anxiety)

3- AFTER the release of the news (1-2 hours ) news traders close their positions, forex start to calm down. In Europe it's usually late afternoon

4- the next days there are other "news", usually from USA, country which release economic "news" almost everyday, like the "michigan sentiment index", of which we couldn't care less, but unfortunately move the markets, even non dollar related, like the european indexes.

5- some websites, like "fxst...." live off these things, with endless, boring articles about possibile long term directions after the news, and before the next one (the only useful being the ones coming from the banks, altough often diverging)

the result is that long term traders are "cut off" most days of the month, forced to search opportunities on lower timeframes. The question is: given that in many cases the graphic is enough to "predict the future" (with momentum, divergences, ecc.) is it really worth depend on so called news?
 

Enivid

Administrator
Staff member
Nov 30, 2008
18,696
1,376
144
Odesa
www.earnforex.com
What most of the traders wish to avoid is that point #2 (DURING) because movements can be rather crazy during that period. If you are trading based on TA on M1-M30 charts, all your analysis can be wiped by 5 seconds of movement after a particularly surprising announcement.

Some traders also attempt to profit from such movements, but it's very difficult with slippage and widened spreads.

Fundamental traders, on the other hand, don't trade news just because the price tends to jump or fall abruptly immediately following the news release. For them, a single news release (with rare exceptions) doesn't change their trading setups.
 

agazio

Trader
Aug 7, 2023
23
5
9
thanks. given the amount of news (an average of 3 per week, just from overseas, not counting the low impact ones) fundamental traders should open positions all the time. On the other hand, the "strong hands" (public and private) might use automatic systems scalping on the lowest timeframes, which open and close hundreds of orders within the same day.
I think in our small way we should trade as if news didn't exist. Less stress, less time wasted, less useless readings, etc.