Trading News – What To Watch Out For To Become A Successful Day Trader!
Trading news is an important part of being able to day trade the markets successfully. Successful day traders know that even simple basic trades at the open is not without risk. Many times success is solely dependent on being aware of your surroundings and who you are trading against.
Retail traders need to respect the heavy hitters and market movers. Every professional trader is aware of one thing. News that’s scheduled to be released and what potential impact it might have should they be in the middle of a trade.
Trading news and it’s implications is something that also needs to be mastered. It’s more than just glancing at the calendar. A comfortable understand of trading news and the times involved around a particular news event is imperative to anticipating what might be happening next on the charts.
Being able to trade the markets successfully at the open is not without risk. Many times success is solely dependent on being aware of your surroundings and who you are trading against.
Retail traders need to respect the heavy hitters and market movers. Every professional trader is aware of 1 thing. News that’s scheduled to be released and what potential impact it might have should they be in the middle of a trade.
Here in the “Expected Impact” section you want to make sure you only have the red and orange boxes checked. In the “Event Types” make sure all the boxes are checked. In the “Currency” section only check the USA box.
The main reason we are checking the orange box above, is to spot the “Chicago PMI” news release. Be careful with this one as his punctuality is part of his punch. He has a habit of never being on time, but you will know when he walks into the room.
Clicking on the folder here will open a drop down list of all the previous news release dates. If you are prepared you will be aware of each and every red envelope that presents itself in our time frame of trading. Incorporating news into your trading plan and recognizing the heavy hitters will serve you well.
The three days I choose not to trade regarding news evewnts are “Philly Fed Day”, “FOMC Statement”, and “FOMC Minutes”. This is my own personal choice, and it was implemented through statistical monitoring and deemed as being algorithmically unstable.
To the right are typical examples of what you are on the look out for. Basically any red envelope news release that has the ability to jeopardize your trade by altering its normal expected algorithmic patterns. You will be well served to recognize any heavy hitter as well as pussycats by collecting data on their historical behavior.
When trading around a major news event an ounce of caution is many times needed. In the video to the right Chicago PMI was going to be released 15 min after market open. The key factor to consider is the large impulse of bar movement that can be associated with it. Taking into consideration that the direction of the impulse is very challenging to predict, it’s better to avoid being in a trade at that particular time altogether. It can go up just as easily and far as it can go down. If the direction is unpredictable, it’s best to just wait it out.
In the video to the right there is typical example of what you are on the look out for. Basically any news release is unpredictable in terms of direction. The important thing to know is when it’s expected to throw the market into a tizzy. Timing is everything. The very last thing you want to happen to you is to get blind sided by the unpredictability of news. The only predictable thing about certain news events is that they are directionally unpredictable.
