Ricex
Sergeant
- Messages
- 358
This post has come about from a casual observation of what new traders seem to be doing a lot of at the moment, and that's trading the news. It's pretty much the first port of call these days for a debutant.
Now I don't want to get all judgmental about this, I can see the attraction of watching a pair soar 30, 40, 50 pips in less than a minute and then thinking how can I profit from this?, how can I get a piece of that action?, that's perfectly understandable. It may even look to some like the only way to make money out of forex, which I think is a shame. It has excitement and makes you feel like a real trader..... in a kind of playstation type way.
The voices that say everybody trade the news have become much louder of late, and they sell a compelling story to inexperienced minds, but I think they sell only half the story.
Money can be made from news trading of course but it is really an advanced style of trading, it requires experience and investment to really work on a level that could be worthwhile or considered worthy of being integrated into your business plan.
The majority of FPA members seem to come here for the free news signals which is a great resource, but how many of you could trade these announcements without this service? I know I couldn't, and if the guys decided to close shop tomorrow what would happen to your trading? are you an independent trader or are you just taking tips on a horse race?
The actual technical side of trying to place a news trade is the side of the story least talked about. Slippage, getting filled at a different price, increased spreads, locked platforms, all common realities of news trading. What we as traders have to ask ourselves every time we trade is "what is the risk involved here?" "are the odds in my favor?"
I would not put news trading on my least risky list.
Nobody likes to hear it but I'm going to say it anyway, there are no short cuts in trading, there are no magic beans, you have to know what your doing and to know what your doing you have to work hard at it.
(there told you you didn't want to hear that )
Now I don't want to get all judgmental about this, I can see the attraction of watching a pair soar 30, 40, 50 pips in less than a minute and then thinking how can I profit from this?, how can I get a piece of that action?, that's perfectly understandable. It may even look to some like the only way to make money out of forex, which I think is a shame. It has excitement and makes you feel like a real trader..... in a kind of playstation type way.
The voices that say everybody trade the news have become much louder of late, and they sell a compelling story to inexperienced minds, but I think they sell only half the story.
Money can be made from news trading of course but it is really an advanced style of trading, it requires experience and investment to really work on a level that could be worthwhile or considered worthy of being integrated into your business plan.
The majority of FPA members seem to come here for the free news signals which is a great resource, but how many of you could trade these announcements without this service? I know I couldn't, and if the guys decided to close shop tomorrow what would happen to your trading? are you an independent trader or are you just taking tips on a horse race?
The actual technical side of trying to place a news trade is the side of the story least talked about. Slippage, getting filled at a different price, increased spreads, locked platforms, all common realities of news trading. What we as traders have to ask ourselves every time we trade is "what is the risk involved here?" "are the odds in my favor?"
I would not put news trading on my least risky list.
Nobody likes to hear it but I'm going to say it anyway, there are no short cuts in trading, there are no magic beans, you have to know what your doing and to know what your doing you have to work hard at it.
(there told you you didn't want to hear that )