News trading might be the most dangerous task in the Forex market. Even so, many traders in Singapore are making big profits by trading the major news like unemployment claim, RBA rate cut decision, NFP, etc. They are not placing random trades before the news release. They are often considered as the most calculated risk-takers. If you want to make a regular profit by trading the news, you should think about the conservative trading method. Trading the market news doesn’t mean you will be exposed to high-risk. Follow the tips mentioned in this article and you can expect to become a professional news trader.
Know the impact of news
Before you start thinking about trading the major news, you have to learn fundamental analysis. Naïve Singaporean traders are always making a decision based on technical analysis. Technical analysis is just a part of this profession. Unless you learn to focus on the fundamental analysis, you can’t make any profit even by using a position trading method. Open a demo account with Saxo and see the impact of the major news on the different pairs. You don’t have to learn trading using the demo account. Try to understand the impact of the news on a specific trading asset. This will give you a clear idea of how to trade the real-time market in the event of high impact news.
Start developing news trading strategy
A traditional trading strategy is not going to work while trading the major news. You have to create a unique news trading strategy to deal with the CFD market. Some of the retail traders say developing a news trading strategy is impossible because the market movement greatly depends on the consumer’s sentiment. Though it’s true to a certain extent, you can always have a draft plan. For instance, you must know how much money you will risk on such an approach. But no matter how well you understand the fundamental data, you should never risk more than 1% of your account balance. You should always think about the worst-case scenario and only then will you be able to create a low-risk exposure news trading method. Use the demo account (try it out here) to test your news trading strategy or else you might experience heavy loss in the real market.
Focus on multiple time frame analysis
Analyzing different time frames is a very convenient way to find great trades. Think about the elite news traders. They always focus on different periods so that they can analyze the potential trade setups with a high degree of accuracy. When you do multiple time frame analysis, you will get many kinds of signals in a different time frame. But don’t get confused with those signals. Emphasize on the higher period signals as it will give you much more accurate information. Forget the fact that you are going to deal with the major news. Consider the multiple time frame analysis technique as your trade filtering method. Once you master this technique, you can easily find great trades during the major news.
Trade with the best broker
To make a regular profit by trading the news, you must think about the quality of your brokerage firm. Unless you trade this market with a high-end broker, it will be hard to make a consistent profit. Naïve traders are losing most of the trades because they don’t trade with the best broker. Without having access to an elite class broker, it will be really hard to make some serious profit. Think about the long term goals and try to improve your trading skills by learning from the mistakes. Once you find the best broker, you won’t have to deal with heavy slippage during news trading. Be smart and forget about the higher fees associated with high-end brokers. Ensure the quality of your trading environment to become the best trader you can be.