News trading is one of the most effective ways to secure a large market movement. In fact, there are many professional traders in Hong Kong who only trade the major news. But dealing with the high impact data is not easy. Unless you have extensive experience with the Forex market, you should never trade the major news. The novice traders always think that trading is nothing but executing trades with some logic. But in reality, it’s more than that. You have to understand the important variables of this market and place trade with managed risk. When it comes to a news trading strategy, you need to be aware of the complex nature of this market.
The trend often gets changed
The new traders are always trading with the market trend. In a word, they blindly execute a trade in favor of the market trend. Even after following a trend trading strategy, and they still fail to make money. You need to understand the fact that the long term trend often changes. If you fail to identify the trend change, you are most likely to lose a few trades in a row. Being a new trader, you need to have the potential to go against the long term market trend. In a nutshell, you need a valid trading strategy which will help you to find the trades against the major trend.
False spikes of the market
When you trade the major news, you have to deal with the false spikes. Never think you can change your life without doing the proper work. As a currency trader, you have to find a reliable broker like Saxo so that you can easily use their premium platform to find good trades. Feel free to visit https://www.home.saxo/en-hk to learn more about the professional trading environment. Once you have access to such a great broker, you have to think about the false spike of this market. On the event of high impact news release, the market will often exhibit a false spike. So, if you execute a trade with a very tight stop, the chances are very high that you will lose a decent portion of your investment.
Dealing with the losing trades
Being a new trader, you must have strong risk management policy. Never think you will make money from all the trades. Even after doing a complex market analysis, you are bound to lose trades on a regular basis. If you lose a few trades, make sure you take a small break. During the break, try to find out the key reasons for which you are losing money. Never take things seriously since it will make your trading career worse. But this doesn’t mean you will keep losing money. Always take 1% risk to protect your trading capital or else you will wipeout your entire trading account.
Analyze the technical data
Those who are new to the news trading section might think technical analysis is not required to make a consistent profit. But technical analysis is just a part of this trading profession. Unless you analyze the technical data, it will be really hard to find quality trades at the key levels. If possible, learn price action trading strategy since it will help you to make a better decision. Never trade the market based on news data as it always results in heavy losses.
Learn multiple time frame analysis
You must master multiple time frame analysis since it is one of the easiest ways to filter out the false signals. Most of the time the market exhibits too many false signals in the event of major news. But if you learn to analyze the price pattern in a different time frame, you will easily find the best way to filter the best trades. Always consider a conservative trading technique in the trading business. Stop being an aggressive trader as it makes things really hard.