I am trading forex for 7 years and I can say that in the beginning of my career in this market I followed every single news related with forex. But, over time I realized that most of it was totally unnecessary. Why?
Because, most of those ‘important’ news will confuse you easy and it will force you to change your decisions or current positions, after wich you will not be able to trade properly. You must be aware that, some of the most popular financial and especialy forex portals write constantly just to attract the readers/traders and they filled your head with so many unnecessary informations, which just sounds like very important. Sure, all of them are living from marketing, from IB and Affiliate contracts and all they need is traffic on their sites. That’s why they write constantly about everything, but trust me, you don’t need a 1/10th of that!
All you need is to follow important economic news which are the ‘market movers’ and you must have that in front of you a week ahead. Check up the coming week and mark somewhere the most important ones, such as: Monetary policy decisions from the Central Banks and their Press Conferences, Unemployment datas and Job reports, Consumer Price Indices, GDP datas… It looks like there is to many of that, but it’s not in the weekly or monthly basis. Interest Rate Decision is the most important one on the long term period, based on which market detect some pointed level and most of the other important news are only ‘the road’ to that point and mostly the short term movers. All other I would say ‘side news’ could lead you in a wrong direction if you don’t read between the lines. You must detect and test how the market is reacting on the same and for that you will need time and experience, but eventualy you will learn.
Don’t waiste you’re time on the news which are not important for you. Remember, you are just a small player/trader in the market and you don’t move the same, you’re just following the trend! Make you’re trading decisions calm and with you’re clear vision for the possible move and stick to the same. Let me show you only one example from this month on how I trade the news, in this case gold trade on FOMC news, April 05.
On this simple example you can see how I prepared my trade for the FOMC minutes 4 hours before the event. I found a technical place for entry, predicted a possible move after the event, placed my order and wait. All I needed letter to do on the same event is to protect my order and to decide where to close my winning position, with 30 pips gain, or 50, 100 or more. I know, it’s not easy as it looks, but this is how you need to trade the news. Not to jump in to position when everything started and when gold or other currencies start to go up/down/up and so on. In that case you will be confused, it could look like the price will go down because of this statement or sentence and then maybe up because of this… It can look it will up because the trendline is broken and then the price turn back… There is no end of confusions then.
This is why I always suggest to traders to do as my personal qoute says; “Use the news to get out of the possition, not to get in” – Mario Urlic
There is another examples of my trading like this and you can find it here in my blog. Learn from the best and experienced traders.