LEARN How To TRADE The News - Forex News Trading Strategy !

Summary

In this video, the speaker shares valuable lessons learned from trading the news in the Forex market, emphasizing the importance of patience and discipline. He reflects on early mistakes, such as chasing news-driven price movements, and provides strategies to avoid getting caught in volatile, high-impact news events like the FOMC or NFP reports. Key tips include waiting 15-30 minutes after the news release before making trading decisions, managing emotions, and focusing on risk management rather than trying to predict the market’s immediate reaction. The video encourages traders to be patient and let the market stabilize before acting.

Takeaways

• 😀 Chasing news moves in the Forex market can lead to poor results, especially during volatile periods.
• 😀 News events like FOMC, NFP, and CPI create significant market volatility, which can cause 'fake out' moves in the first 15-30 minutes.
• 😀 The best approach during high-impact news events is to exercise patience and avoid trading immediately after news releases.
• 😀 Many traders make the mistake of trying to predict the market’s immediate reaction to news, but this often leads to losses.
• 😀 Sitting on your hands for 15-30 minutes after news releases helps avoid getting trapped in short-term market noise.
• 😀 News events can cause a temporary price spike in one direction, followed by a reversal, which is why it's important to wait for the market to stabilize.
• 😀 It's not necessary to trade every high-impact news event—sometimes it's better to skip trading during these times to avoid emotional decision-making.
• 😀 Trading after the initial volatility settles (30 minutes or more post-news) often provides a clearer market direction and better trade opportunities.
• 😀 Fake out moves are common in the market right after news releases, so it's crucial to wait and observe before jumping into trades.
• 😀 Patience, discipline, and not rushing into trades during high-impact news are essential for success in the Forex market.
• 😀 If you're unsure about how the news event will impact the market, it's okay to not trade and wait for another opportunity.

Q & A

Why is it important to avoid chasing news moves in Forex trading?

Chasing news moves can often lead to getting trapped in fake-out moves, where the market initially spikes in one direction but reverses shortly after. This can cause unnecessary losses, especially during volatile high-impact news events. Instead, it's better to wait for the market to settle before making a move.

What is a 'fake-out' move in Forex trading?

A fake-out move occurs when the market makes a strong initial move in one direction right after a news event, but then quickly reverses. This temporary move often traps traders who try to act too quickly, leading to losses. Understanding this behavior can help traders avoid emotional reactions and mistakes.

How long should traders wait after a news release before making a trade?

Traders should wait for 15-30 minutes after a high-impact news release before making a trade. This waiting period allows the market to settle and provides a clearer picture of the true direction of the market, helping traders avoid getting caught in volatile fake-out moves.

What role does patience play in trading the news?

Patience is critical when trading the news because it allows traders to avoid making emotional decisions. By waiting for the initial volatility to pass, traders can enter the market with a clearer understanding of its direction, reducing the risk of chasing temporary price movements.

Why should traders consider not trading during certain news events?

Certain high-impact news events, like NFP or FOMC, can lead to extreme market volatility that may not align with a trader’s strategy. On these days, it might be better to skip trading altogether and return to the market when conditions are more predictable.

How does emotional trading impact a trader’s performance during news events?

Emotional trading can cloud judgment and lead to poor decision-making. During high-impact news events, the market can be unpredictable, and traders who react emotionally might chase moves or enter trades too early, which can result in significant losses.

What are some common mistakes traders make during high-impact news events?

Common mistakes include chasing the initial market move, entering trades too early, or reacting emotionally to sudden price changes. These actions often lead to getting trapped in a fake-out move or missing the proper setup after the news has settled.

What is the best approach to avoid getting caught in a fake-out move?

The best approach is to wait for the market to stabilize after the news release. Avoid entering trades immediately and give the market time to form a clearer trend, usually after 15-30 minutes, before making any decisions.

How can traders know if their setup still holds after a news event?

After waiting for the initial volatility to pass, traders should check if the market is still respecting key levels of support, resistance, or trendlines from before the news. If these levels still hold, the original setup might still be valid for a trade.

What can traders do if they are unsure about trading during a news event?

If unsure, traders can skip trading during the news event altogether. There are always other trading opportunities in the future, and it's better to avoid the chaos of high-impact news events if you’re not confident in your strategy.