The School of Profit: Trading on the News

«I trade forex, but they cheat all the time. I have all the deals go in red zone. I close bad positions. And in a while after I close my positions market goes where I set the goal! Is this a conspiracy?»

The classic recommendation from “trading teachers” is that you cannot trade when there is news release. Usually all bad situations happen when you trade on a high volatility moments.

Why we shouldn’t trade on breaking news and data releases?

Because the psychological burden on the trader is increasing. If you do not do preliminary preparatory work, then at the time of the release of statistics, trader is not able to make a strong trading decision.

✅ You should follow your ideas and thoughts and write them down

✅ Follow your psychological condition all the time

In the moment of high volatility market, the direction of your deal may be chosen right, but if at the moment the first surge in market activity goes in the opposite direction, then you begin to doubt yourself, doubt the decision that was made, and doubt the advisability of holding a negative position.

Sometimes, it happens that you flip a deal. Or it happens that you randomly turn the position and close position with a bad result. Those are emotional decisions.

❌The situation can become worse if you open «lock» (both buying and selling positions on the same currency pair). Then here appears a problem to get out of this lock.

Look, it is an easy situation – you get into psychological instability and “the market has made you.” ☠️

I don’t support an idea not to trade when there some news are being released. We need market volatility. When to receive volatility? Of course on the news.❗️ The main question is about “How to understand the correct entry point into the market?”, “How to resist the urge to hysterically buy/sell after the first surge in quotes?”.

For that we need to draw a graphic picture of the currency pair in advance and determine in advance technical expectations for yourself where you will be ready to work on the rebound / breakdown. Where critical levels are for closing a position (both profitable and unprofitable).

If you have done preliminary work, and statistically, from your own working experience with this currency pair/index/oil, you personally understand that you can afford to trade on “non-farms” or trade on any other news – do it.

BEFORE you start to open deals on the publication of statistical indicators – knock down personal statistics on the behavior of a particular currency pair on specific news and then trade.