I am not very fond of placing pending orders before high impact news, they very often provoke whipsaws and one ends up with an open position in the opposite direction. It's not something that happens every time, but it does happen often enough to be a cause for concern.
Should I close my position before high impact news?
- Thread starter Azlan00IM
- Start date
It depends on your trading strategy. And if the market is in trend, eventually it will be in the trend, no matter what the trend is. It's the normal rule. But if the news data is too much unexpected it can give you a margin call as well. So it is better for newbie to stay away during high impact news.
H
How do you determine a trend? Your words make sense but some details need to be added to make it really valuable recommendation.
ishan agarwal
Banned Multi
- Messages
- 70
Deciding whether to close your position before high-impact news is a personal choice that depends on your trading strategy, risk tolerance, and market conditions. Here are some factors to consider when making this decision:
- Volatility and Market Reaction: High-impact news releases can significantly increase market volatility and lead to sudden price movements. If you have concerns about potential adverse effects on your position, closing it before the news can help avoid unwanted surprises. However, it's important to note that market reactions to news can be unpredictable, and sometimes the impact may already be priced into the market.
- Trading Style and Time Frame: Consider your trading style and time frame. Short-term traders who focus on quick moves and intraday fluctuations might prefer closing positions before high-impact news to avoid potential volatility. On the other hand, long-term traders who take a more patient approach may be willing to ride out short-term market fluctuations and hold positions through news events.
- Fundamental Analysis: Evaluate the potential impact of the news on the underlying fundamentals of the asset you are trading. If the news is expected to significantly alter the fundamental outlook, it may be worth considering closing the position, especially if the new information contradicts your initial analysis.
- Stop Loss Orders: Implementing appropriate stop-loss orders is an effective risk management tool. Consider setting tight stop-loss levels that protect your position in case the market reacts unfavorably to the news. This way, even if you decide not to close the position, you have predefined risk limits in place.
- News Trading Strategy: Some traders specialize in news trading and actively seek opportunities to capitalize on high-impact news events. If you have a well-defined news trading strategy and feel confident in your ability to manage the risks associated with such events, you may choose to keep your position open.
Purecaster
Private, 1st Class
- Messages
- 52
If there is news that is really impactful then you don't need to close your positions... you will be stop hunted 
However, if you realize the negative influence of this or that recently release news and you can quickly analyze potential repercussions, then you can close the position. In this case it's mandatory to use stop losses, or trailing stops to move them whenever you need it, again, to be stop hunted rather than get a stop out or margin call.
In many cases it's not required to close the positions, cause if bullish volumes are big enough, the price will outplay the drawdown on the news.
However, if you realize the negative influence of this or that recently release news and you can quickly analyze potential repercussions, then you can close the position. In this case it's mandatory to use stop losses, or trailing stops to move them whenever you need it, again, to be stop hunted rather than get a stop out or margin call.
In many cases it's not required to close the positions, cause if bullish volumes are big enough, the price will outplay the drawdown on the news.
Faelar
Corporal
- Messages
- 109
Agreed, it's better to be one step ahead and adjust position sizes before significant news release. Fortunately, the time when major economic news released is well-known, so such a due diligence will be only beneficial.
Benjihenco8219
Private
- Messages
- 19
That I would say depends entirely on your analysis of that certain news, when you are not sure about ending up with profits or on a loss the smart move will always be to close those positions, but there are traders out there who are experts on news trading so if you spend some time on that and go about researching about the matter, I feel like that would clear up this issue for good.
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