Thought about news trading
I know that there is a lot of disagreement about trading the news because a lot of reason :
Volatility times
Brokers tricks include freezing the platform, widen the spread , filled way far from the price you wanted to ( slippage ).
limitation about scalping and on.
Well im thinking that there is
one reason that the brokers do all this tricks and that it because in the news you can
profit.
There is a big move of the price in a known time and this can make you profit.
When im looking at the Forex chart at any time its like an equation that all data's are unknowns, look at the chart and tell me if you know where the price will move now - no one know.
But in the news we have two things in the equation that we know 1- that there is going to be a move in the price 2 - and the time that it will happen.
Those two things help us to solve the equation just like in mathematics equations.
So what about the brokers tricks ?
Lets be realistic its a big problem we are trading through their platform, the brokers will therefore have an advantage over us.
But we can find some solutions to the problems, lets thing about the solutions :
Restrictions and freezing the platform - first we need to find a broker that declared that he have no restrictions about scalping and trading in the news time, also send him a mail and ask him to be sure about that. there are brokers that have no limitation about scalping and news trading.
Filled far from the price and slippage - What we can do in our site to prevent delay in filling the orders is a good Internet connection, and using an automated software like MetaTrader and match an EA ( Expert advisor ) to the trading technique . One more very important think about that and preventing slippage is to put a full orders that contain stop loss and take profit. I know that all of us want to take the all 30 pips of the movement in the price, but we should not be
greedy
, you need to decide how much pips you want for TP ( im usually put 7 , if you think its few pips please give me 7 pips every day and im in haven in the rest of my life ) be reasonable ,think about the widening spread in the news and put it in the order setup from the start and not after the order will execute - it will be to late.
Volatility in news times - also big problem but we can provide a partial response again by not be greedy. we should put a limit order far enough that the whipping and the widening of the price will not catch our order. only the real mouvement of the price.
This will need to be checked with the broker platform. No less then 8-9 pips away from the current price in the news time.
One more important thing is practice practice and more practice a lot of practice don't be hasty and not to hurry opening live account.
I know the trading is complicated and i didn't give you here answers to 100% success ( who can ? ).
But i hope that i help you a little to overcome the news trading problems and to be a better traders.
If i will remember more solution i will add them in the future.
Good trading to all of us
Alon