What happens when you trade during important news events?

One way to avoid crashing and burning while trading during important news events is staying informed. Take it from an expert Crash Test Forex Trader; if you don’t revise your trading tactics during important news releases, you are doing to make major losses!

Take, for example, an attack on American soil or huge floods in different parts of the world. With those parts being thrown into financial difficulties within seconds, it’s natural for the economy to take a knock or two. With that said, there is no need for you to be around when those knocks start stirring the Forex trading boat.

There is no telling how the market will react

With so many news events taking place these days, there is no telling how the market will react. For example, the recent speeches delivered by Donald Trump created huge waves in the EUR/USD Forex pair. When you look at the charts, a large group of traders began selling off their stock to be one the safe side as they had no idea what the market reaction might be when the president’s speeches hit television screens across the world.

For that reason, it is safe to say, that in order to avoid emotional decisions, you need to trade very carefully!

Prepare for a volatile market

Since there is no way to predict what the market will do, many traders tend to follow their gut. That implicates a highly volatile market; something not all traders wants to get caught up in. When trading, you need to assess the risk you will incur and decide whether it’s going to be worth it in the end. Some traders feel the need to trade when the markets are volatile in the hopes of a bigger profit. However, these huge risks can also eat away at their entire account if they don’t know exactly what they are doing.

Stay informed of news events while trading

Although some traders bring their trades to a complete standstill during important news events, others might think the opposite. Whatever you choose to do, you need to ensure you stay informed at all times. For example, short-term news events, such as parliamentary speeches, will cause waves in the market but after a few days, it might simmer down.

Long-term events, such as huge floods and other natural occurrences might cause the market to rise or fall sharply and stay within that perimeter for a while. Thus, keeping informed, whether you are currently trading or not, will help you form a better understanding of the market.

What to do if you want to trade during news events

If you choose to trade during these periods, you need to protect yourself from all angles. Although it’s a trader’s job to thrive in volatile markets, you still need to manage your risk effectively. To do this, you’d need to tick off a couple of items from your list. Firstly, you need to ensure you can stay up-to-date with news events even if you are not in front of a computer or TV. Make use of phone apps to notify you of any important news events. That way, you can adjust your trading strategy on-the-go.

When you open a trade during these events, never forget your stop-loss. This, again, from the perspective of a Crash Test Forex Trader, is something that can cost you a pretty penny if not added to your trade…

If you trade during news events and lose capital, it might scare you to trade during any other news events. As news events are spread almost daily, it will cause you a lot of valuable trading time. Thus, there is no need to stop trading during these events.

All you need to do is sharpen your trading skills and keep your ears on the ground for any market ructions. Finding a good seat in the house is always better than having to follow the crowd when it comes to trading. Since being your own leader is what makes an expert trader, it’s time you take your financial future into your own hands!

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