Forex News Trading Is Not Newbie Friendly
One of the first strategies learned by the Forex newbies is following the news and trading in accordance with the various news releases that can be considered related to the currencies and the foreign exchange market. The good examples of such news are the macroeconomic reports, interest rate changes, political news, and corporate releases. Two main problems arise when the newbies try to trade on Forex news:
- Trading too late. Usually, the main reaction to the news (if they are not too important and pivotal) goes out during the first several minutes after release. New traders often react to the news hours after the release (and the lack of the good source of the Forex news is not the least reason for that). They enter after the main price action has gone and the correction is setting up. That is quite a bad thing to do.
- Trading inside the news. Some newbies try the other extreme – they try to trade immediately after the release. This approach has a serious disadvantage as only few brokers will offer smooth execution during news releases or will not widen the spreads by some unbelievable number of pips (and the newbies are usually quite bad at finding good Forex brokers to trade with).
So, what should be done if you are a Forex newbie, want to profit from the Forex news releases but do not want to get beaten by the losses that usually occur as a result of the mentioned problems? The answer is quite complex. I would recommend new traders to stay away from the
For example, you can set the pending orders to buy and sell 10 pips above the local maximum and 10 pips below the local minimum on EUR/USD before the US
You can also use the following MetaTrader expert advisor to trade on news releases (but it is not very newbie friendly): News Trader Expert Advisor.