Qualms Against News Trading? Try it with Echofin powered teams.
There is no doubt about the fact that some people are indeed extremely good and successful at trading the news. Such people can be found everywhere in online trading social circles, and indeed, some of them have made Echofin their home over the last year or so. Still, there are always traders out there who have major qualms about the undertaking, and who won’t hesitate to make their doubts heard in this regard.
Trading the news may be easy enough, but doing so successfully is an entirely different accomplishment. It is also anything but easy. Proper news-trading requires skill, experience, proper risk management over the long-run, a thorough understanding of the traded markets as well as of the reactions of speculators, who are always keen on cashing in on the confusion often reigning in the wake of major economic news-announcements.
In addition to the above, lightning-quick communication, a proper news-stream and some expert insight are also required. These are the areas where Echofin can- and indeed: will help.
Let us take a closer look at the exact issues detractors of news trading bring up, whenever they set about bashing the practice.
Some people view news trading as the purest form of gambling. To argue in favor of this view, they bring up examples of traders who place pending orders before the event and then wait for the order to be triggered after the announcement. Such an approach will indeed be counterproductive, and it is not the way to go about trading the news at all. While it is indeed gambling, it has little to do with actual news trading.
Echofin users have much better means at their disposal to trade the news, and through the opportunities offered by the platform, they are able to execute certain strategies right down to the minutest detail or to simply follow someone more experienced than them, someone who is willing to provide guidance.
There are a number of teams on Echofin, where highly experienced news traders conduct live trading sessions. The NFP is a very popular and rather obvious choice in this regard. Through the tools supported by Echofin, those in the know can convey every subtle aspect of their personal news-trading approach, without anything being lost to lag or “translation”.
Another argument oft-employed by those preaching against news trading is that you are not really trading the news, but rather the expectations and people’s reactions to the eventual announcement.
The answer to that is that you are in fact trading all those things (and possibly more), which is why news trading is such a difficult undertaking. There is just no way around it: price does indeed react in many different ways to news and that can be extremely confusing. Beginners often end up chasing the price, which is usually a recipe for disaster.
Experienced news-traders know too well to expect this added volatility and they know how to handle it too.
For the duration of the first bar, following the release of the targeted news, experienced traders usually sit back and wait. Sometimes, even the second bar is allowed to come and go. It is usually the third bar that prompts action on the part of the news trader, and by this stage, thanks to lightning-quick technical analysis, the direction of the trade is known as well.
A good news trader knows too well that he/she should not take more than two trades and the stops are well known as well. Once stopped out, the trader also knows not to re-enter these trades.
Exit-times are of the essence as well, which – given the nature of the trading – should not be abused.
Attempting to trade the news without a plan is an obvious recipe for disaster. While the above-dropped details seem simple enough on paper, they are obviously not that easy to apply in practice.
Through an Echofin trading team though, one will never be left to fend for him/herself. Step-by-step assistance is usually provided, which is quite a cinch really, given the data transfer and charting capabilities of the platform. Real-time video streaming is also possible, which means that the trader conducting the session can effectively “hold the hands” of his/her followers all through the trading session.
If you prefer price-action trading, there are scores of advantages you’ll be able to list in support of your choice. You can be more selective technical analysis-wise and you’ll be able to wait for better setups. You can trade many different chart/candlestick patterns and you can be much more flexible in regards to time frames.
Spreads are much tamer during regular price-action trading too.
Still, none of that changes the fact that major economic news represent outstanding trading opportunities for those who know how to take advantage of them.