Don't trade on news release if you don't understand market

[jackcm]

As we've already known, there was important event today: RBA Interest Rate decision.

Interest rate decreased 0.25%, from 2.75% to 2.5%. Everything happened as many analysts expected.

Since interest rate decreased, some of you might think that AUD must decline after rate cut. Well, let's watch this:

AUDUSD: +0.63%
AUDJPY: +0.46%
EURAUD: -0.51%
GBPAUD: -0.61

AUD has been rising after rate cut but why? This is called "buy the rumour, sell the fact" and Wikipedia explains:

"Buy the rumor, sell the fact": This market truism can apply to many currency situations. It is the tendency for the price of a currency to reflect the impact of a particular action before it occurs and, when the anticipated event comes to pass, react in exactly the opposite direction. This may also be referred to as a market being "oversold" or "overbought". To buy the rumor or sell the fact can also be an example of the cognitive bias known as anchoring, when investors focus too much on the relevance of outside events to currency prices.

Therefore, if you are not experienced traders, especially beginners, you should never try to trade on news release.

 

[Cutiekc]

Thats well known to me that I should not trade the news if I am not sure. At times the new speculatories never comes to past. Therefore I intend making my own analysis and when I feel like trading I do trade but on such occassion I will hereby have a very strong stop loss and take profits to guide me even when I am on the scalping method.

 

[kaiceaziz]

As we've already known, there was important event today: RBA Interest Rate decision.

Interest rate decreased 0.25%, from 2.75% to 2.5%. Everything happened as many analysts expected.

Since interest rate decreased, some of you might think that AUD must decline after rate cut. Well, let's watch this:

AUDUSD: 0.63%
AUDJPY: 0.46%
EURAUD: -0.51%
GBPAUD: -0.61

AUD has been rising after rate cut but why? This is called "buy the rumour, sell the fact" and Wikipedia explains:


Therefore, if you are not experienced traders, especially beginners, you should never try to trade on news release.

what RBA rate decision means? Whatever it was believe me you cant ignore the news. Especially special events. Do you remember the last british election? Gb currencies rised and fallen over than 300 pips in seconds all the day . You could hardly excute your order . In a second you have 100 pips profit and after a second or two you are in 50 pips loss. All traders that didnt lock their orders lost all their balance .

 

[jackcm]

what RBA rate decision means? Whatever it was believe me you cant ignore the news. Especially special events. Do you remember the last british election? Gb currencies rised and fallen over than 300 pips in seconds all the day . You could hardly excute your order . In a second you have 100 pips profit and after a second or two you are in 50 pips loss. All traders that didnt lock their orders lost all their balance .

First, you should improve your knowledge because of your question about "RBA Interest rate decision" if you don't want to be price action trader.

Second, I DON'T RECOMMEND YOU OR ANYONE TO IGNORE NEWS.

Third, as I said, "trading on news release is very dangerous !"

 

[riddick09]

Forex news and events are definitely one of the things to be concern of and become aware of the possible effect on the market. Thus, we should understand it's impact in the market and when it will happen if this will be before, during or after the news is released. While, many traders take advantage of it those fundamental traders.

 

[naninov]

forex news especially on interest rate decission will always be waiting by forex news trader, when some certain data will release usually market will react against the fact it may caused by intervention of that government country to anticipate further rate decrease of that country currency

 

[kaiceaziz]

We must be aware from rumors and fabricated news . A friend of mine said to me once that some traders always try to blow a rumour in the news channels in order to make the turrent goeo to their feavor. The even runs news site for that giving the news they want and hiding ones that affect them bad. I didnt believe my friend that time. Do you believe in him?

 

[Cutiekc]

Well, trading on news is also called trend traders. Since forex trading is that so complicating. At times some news does not take immediare affect on the market so on getting a news we should perhaps have two source for it and when isnt more clear then we should leave that pairs or that currency and move to a more transparent one at that moment.

 

[winuga]

trading on news may need more preparations rather than trading technical, we must have fast and stable internet connection, right broker to trading on news, preparing capital used for trading on news with 2000 pips strength to backup of fluctuation movement of market, if we fail comply this than get ready to loose easily from crazy market movement

 

[batigor]

trading when some big news release mostly dangerous for trader using small capital because of market volatility usually makes bigger range movement in a very short time, sometimes even cut loss does not help because usually will reach easily by market movement, it is better to wait until market make certain trend and just follow the trend that build from the news impact

 

[Markllee30]

Thank you for sharing this very good tips and advice...I find this post very useful.

 

[Decub]

I think one of the worst mistakes one would make is trading on news when he isn't sure of how the market is moving. More so, to avoid trading with reliance to data supplied by unconfirmed Forex news sites.

 

[rexway]

yes that is true don't trade on news releae if you don't understand the market and he went away t trade he is going to encounter some loss which he did not expect

 

[barood4money]

Market news gives a rough idea on the things will happen in the market. But it is just an idea. There is no guarantee that it will surely happen or not. So first analyse on your way then take the step.

 

[Decub]

Market news gives a rough idea on the things will happen in the market. But it is just an idea. There is no guarantee that it will surely happen or not. So first analyse on your way then take the step.

Exactly, the news we get from the Forex news sites or certain bokers only gives us a clue and doesn't mean all we do should be based on that. An understanding of the market os a just the most important.

 

[riddick09]

We should based on that as gathered information but we will not only rely in one news but several ones to know the influence or effect of certain news. Because, the news will affect the market in different time, can be before, during or after the news is released.

 

[Daisy]

During news releases, there are noise trend and those noise trend calm down after a coupe of hours so the trends are just news induced and not real trend but the scalper can get in and scalp some money and then exit in a few minutes if it doesn't hurt but its too risky too. Its risky for short term traders but they can still scalp some during those news release. News release create fake noise movement.

 

[ryuken]

I think the news release can make us more money based on the right decision. but we have to also make sure that we are not choosing the alternate ways to invest and verifying the information. this is something you have to understand that it would make you some good earning as well.

 

[gkintl]

It is always better to avoid trading during the news time. This is because the impact of news on price movement is to be gauged by a trader before placing an order. Whether the news would create positive or negative impact is not that difficult to ascertain. However, it is rather difficult to predict whether the news would create the desired move. This mainly depends on the top tier banks which contribute to more than 70% of the trading volume. So, it is better to wait for at least 10-15 minutes before entering a move. In case of cross pairs, usually the price retreats to where it originated.

 

[tray]

That is true we dont need to trade in forex trading when we see the market news been release immidiately atleast we must wait for some comfirmation before we trade in this market.
After just doing that I think that the trader is on the safer side of the market to trade as he really like and making alot of profit as well