I am sure that throughout your Forex trading career, either short or long, that someone has suggested that you trade the news. Or at least use the economic news to help with your trading. Now I am sure that these people aren’t trying to waste your time but that is exactly what they are doing.
Believe it or not but all of the information that you get from reading the news can easily be read in a more efficient way. That way is using a chart, that’s right a regular old candlestick chart will get the job done.
Each candlestick that is printed on a chart tells a different story, being able to read what the story is telling you is very important. Reading a chart at the most basic level is very simple.
A small bodied candle means the market is undecided. A big bodied candle means the market has made up its mind and is ready to go one direction. A candle that closes above its open price is bullish and a candle that closes below its open price is bearish.
See it is very simple to see what the market is doing and it is also easy to what it is going to do just by reading the candles. All you have to do is read the chart not the news.
Now you might be asking yourself, “How am I supposed to read the news from a chart?” but you aren’t going to read the exact news from a chart. What you are going to do is read what the market is doing by watching how the market is moving.
For example if some news comes out that is making the US dollar stronger then you will be able to notice that by looking at a USD chart and seeing that it is bullish. You don’t need to waste your time reading the news and trying to predict what the news might do to the market because the charts will tell you everything.
Also many times when news comes out it doesn’t even affect the market in the slightest and you would know that if you were just reading the chart.
That is all you need to be a successful trader and to make smart trades. The news will only complicate and waste your time.
I would suggest mastering the art of reading a chart and understand what it is telling you, if you do that you will be a much more effective and profitable trader.
So overall I am trying to tell you that reading the news and trying to trade off of that is a big waste of time and not to mention an ineffective way to trade also. The reason for that is because everything that you would ever need to know will be told as a candlestick on a chart.
Article was written by Josh at TradingWithPriceAction.com