When trading the news, you can either have a directional bias or a non-directional bias.
Here are some other things to keep in mind when news trading:
- When you have a directional bias, you are expecting the price to move in a certain direction, and you’ve got your orders in already.
- It is always good to understand the underlying reasons why the market moves in a certain direction when news is released.
- When you have a non-directional bias, you don’t care which way price heads. You just want to get triggered.
- Setups for the non-directional bias are also called straddle trades.
That’s pretty much it…
Is it really that easy???
HECK NO!!!
You’ll have to practice and trade many different reports before you get a feel for:
- Which news reports will make the market move
- How much of a surprise is needed for the market to move
- Which reports to avoid trading.
Like in any other trading method, your success depends on your preparation.
This will take time and practice. Do your homework and study the economic indicators to understand why they are important.
Remember, nothing worth having comes easy, so stick with it and you’ll find that trading the news will be very rewarding once you get the hang of it!
Reprinted from Babypips, the copyright all reserved by the original author.
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