The Forex news you can get today, is delivered quicker and is more comprehensive than ever before and people want to trade these stories for profit but they make key errors when doing so and lose. Here we will look at how to trade Forex news the right way and win.
The first key point to keep in mind is that the news itself is NOT important, its the traders view of it which is. While we all have the same facts to look at, we all draw different conclusions from what we read and your opinion, mine and everyone else’s combined makes the price.
When trading the news what you have to keep in mind is:
It’s simply opinions and these opinions, normally reflect the view of the majority and always remember, the majority losses money! A quick look at history, tells us markets collapse when the news is most bullish and rally when its most bearish and this simple fact, will tell you the RIGHT way to trade news stories and it’s this:
Focus on the traders reaction to the news only!
For example, if a bullish Forex news story fails to push prices higher or a bearish news story fails to push prices lower, this is warning you of a potential trend change.
Traders always push prices to far up on bullish news and to far down on bearish news; this is because greed and fear, drive prices to far up or down and then prices come back down to more realistic values.
Looking at how traders push prices in relation to news, is a far better way of trading than trying to trade the news story itself. Will Rodgers once said ” I only believe what I read in the papers” and while he was joking, most traders take the word of a CNN or CNBC or other news wire expert and follow them and lose.
If you want to win using Forex news, simply check the story and see how it moves the price and if you do this and watch for bullish news which fails to move prices higher or bearish news which fails to push prices lower, then check your charts for a potential trend change you can make a lot of money.