Online Trading
News and the Stock Market
Sunday August 13, 2:00 am
by
View Below  Trading Financial News Releases
Author: Chris Corrin
I want to start this article with a piece of advice and a warning.
You may have seen advertised, trading systems that offer
you the chance to trade for only a few minutes a day and
you will make a fortune, sounds good doesn't it ?
On closer examination of these systems I believe they should
be issued with a severe wealth warning on them!!
The reason ? More often than not they try to teach you to
attempt trading at one of the most volatile times of day,
ie just before the announcement of major financial news.
You may as well play roulette with your trading account.
Black or Red, which will it be today ? You might get lucky
and pick the correct direction , but what about next time when
you arent so lucky?  The major drawback with this methodology is that it is very
difficult to get your orders filled by your broker when the
news is released , due to the immense quantity of orders
being traded in that period. The bottom line is that your
"Get me out" order is ignored in the rush and you face a much
larger loss than you expected. Even if you have wisely placed
a stop close to the original market price , There is no
Guarantee that your broker will honour it!!! If you examine the small print of most online brokers they all
seem to have a clause which precludes this promise "in times
of exceptional activity" ie when the NON FARM PAYROLL news has
just been released.
Aden Rusfeldt in his "Currency trading Made Easy" course
reviewed here
does not recommend trading the news at all until you have
a lot of experience under your belt as a Forex trader For those with deep pockets and an iron constitution here
is a brief description of a potential way to trade the News but
with very limited risk.
First of all go with the consensus. Normally before the news
is released there are a few news feeds that try to predict
the outcome, so use this and decide if you are going long
or short.Normally the concensus is correct about 65% of the time. Secondly, enter your trade with one minute to go before the scheduled
time of the news release, in the direction you think it will go.
Place a stop 10 pips back and a limit order to take 20- 25 pips profit.
If you are right 50% of the time , you will end up being a winner
as each winner is 15 pips bigger than the losers.
I must admit I have tried this method a few times with my demo account
and have made both spectacular profits as well as a couple of big losses
I think you must have real faith in your brokers ability to fill your
orders before you risk real money on this strategy.
Chris Corrin
Chris@beginforex-trading.com
http://www.begin-forex-trading.com
Blog at http://begin-forex-trading.blogspot.com/
Main articles page — http://www.eminitrader.com/stock-market-report/index.html
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