News trading is also another methodology for speculating the forex market, and the capital markets in general.
Many traders speculate solely on the news while others implement a combination of both news and technical analysis.
The ability of a trader to speculate wisely, and on time, is what differentiates professional traders from amateurs.
By being able to use a standardized strategy that will enable you, as a trader, to track your performance, speculate wise, and maintain consistency, then your chances to succeed are far bigger.
News trading should be implemented wisely
Therefore, when speculating as per the news, some key indicators must also be used to confirm your entry and exit before and after an event takes place.
Usually, traders wait for a big event to take place for triggering their order and sometimes this can cause a delay in the execution of an order or placing an order extremely fast, thus leading to losses.
On the other hand, some traders place two different orders, a sell, and a buy, hoping that the volatile move, following an event, will cancel one of the two orders, and one will end up profitable. This condition never ends up positively in the majority of the cases.
Moreover, what is important to know when trading the news, is to wait for an event to take place, but in the meantime, having a volatility indicator, or at least one that can also show to you the oversold and overbought levels, thus enabling you to achieve a profitable order.