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Should I close my position before high impact news?

Discussion in 'Beginners Bootcamp' started by Azlan00IM, Jun 25, 2015.

  1. Azlan00IM

    Azlan00IM Private

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    Hi, I'm new to forex and currently practicing on demo account. I noticed that once a high impact news is announced at forexfactory, the price suddenly rise or decline up to hundreds of pips. Which makes me wonder, is it safe to keep my position open? Or should I close the position before the news is announced?
     
  2. RahmanSL

    RahmanSL Major

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    You can make a lot of money if you are correct in your prediction/analysis of the market before the high impact news....and loss your shirt if you got it wrong.

    On Demo account, it's fun to play the high impact news, but on real live account involving your personal money, until you have gained sufficient knowledge and experiences in trading the forex market, I would tell you to sit aside during high impact news.
     
  3. Azlan00IM

    Azlan00IM Private

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    My concern is, what should I do if I'm still in floating loss before the news? If I close the position, I will lose money. If the position remain open, there's still a good chance that I can profit from it.
     
  4. RahmanSL

    RahmanSL Major

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    ...ahhh...so you want to gamble that way :p

    I would say:
    1) Put "stop loss" to prevent account stop-out if news go against you...that means you will have to sustain some losses...BUT if market move with you, then you will be all smiles and full of joy.

    2) If you don't want to close the opened positions and suffer losses, deposit more money immediately into your account to ride out any losses...BUT that can mean you will loss even more money if market go against you and kept on going the other way :p
     
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  5. Azlan00IM

    Azlan00IM Private

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    I'll go with the #1 option. Thanks for the quick response.
     
  6. victoriajensen

    victoriajensen Private, 1st Class

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    It really depends on your experience and willingness to take risks. To be honest, I've been trading for quite a few years now but I still usually close my positions because I consider keeping them open to be too risky.
     
  7. Pharaoh

    Pharaoh Colonel

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    If not closing trades, then put in a tight SL. Big news surprises can blast right through any of those beautiful support and resistance lines you've got on your chart.
     
  8. arigoldman

    arigoldman Recruit

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    +1, know your fundamentals
     
  9. WatanFX-Rep

    WatanFX-Rep WantanFX Representative

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    If you are doing a pure technical play and have no idea what impact a news would make, I would go with pharoah's comment, which is to tighten your stop loss.

    Now, the thing is you should be ready mentally for your stop loss to be triggered due to a news event, only for the price to come back to your original prediction. This happens quite a lot in the market, and is a source of headaches for all traders.
     
  10. Froso@FXNET

    Froso@FXNET FxNet.com Representative

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    High impact news is one of moment the condition in the forex market being uncertainly cause in many times this a time where the movement are unpredictable so if we are not sure our open then its will be wise we close our position but if have good confident with the analyze that we made then hold its till get good profit .
     

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