How to trade news
Here are some tips that I have for you on how to trade the news:
- Know how the price moves
- Ignore the first move
- Wait at market structure
- Trade the reversal
1. Know how the price moves
Generally whenever a piece of news releases…
The market whips up and down and then it goes quiet a little bit.
There are many variations to it.
It could also spike down and then go up before it goes quiet.
So whenever high impact news releases, the price tends to do a few whips before it goes back to its normal market condition.
Bear this in mind because you’ll see this a few times later on.
2. Ignore the first move
So whenever the news just comes out, there's usually the first move.
The market is either going to break out higher or breakdown lower.
I want you to ignore the first move.
I’ve got two reasons why.
Firstly, because the spread is usually pretty wide.
If you look at your trading terminal, your spread is usually wide during this period.
You don't want to be trading when the spread is wide.
Because you're immediately down 20 to 30 pips the moment you hit the buy or the sell order.
So it's not favourable to you.
Secondly, the first move is usually a fake move.
So don't get suckered in by the huge momentum candles – because it's usually the fake move.
3. Wait at market structure
Don't just chase the markets.
Instead, be patient and let the price come to you.
What I mean by waiting at the market structure is this…
Let's say prior to the news release, the price forms an area of support.
Then that is a market structure where you’ll look for buy opportunities.