http://www.exchangematters.com/forexblog Currency Trading & Forex Information Tue, 08 Jun 2010 00:34:00 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 http://www.exchangematters.com/forexblog/185/high-probability-trading-strategies-daytrading-tactics/ http://www.exchangematters.com/forexblog/185/high-probability-trading-strategies-daytrading-tactics/#comments Thu, 26 Mar 2009 03:25:19 +0000 admin http://www.articlesinsight.com/Art/5567/263/High-Probability-Trading-Strategies-Daytrading-Tactics.html
Day trading is the most active form of trading having maximum trading risk It requires real-time news, quotes and charts Day traders practice many complex strategies for getting profited from the market Here are some simple tactics which can minimize trading loss of day traders, especially beginners Try to incorporate them in your daily trading plan and i believe you will see an improvement in your trading

* Concentrating on certain group of stocks or an industry Specializing gives traders a chance to study deep and find more profitable opportunities Know the characteristics of certain sectors or group of stocks and how it is affected by the market index For example, if you are trading Google, then you would want to be noticing the Nasdaq index Therefore if you have any long positions on and you see the Nasdaq index starting to tank, chances are that Google will likely follow the index in going down and you can refrain from opening a long position or close your current long positions

* Using traders systems with hot/short lists Then traders can find opportunities quickly and easily for stocks (or other instruments) they are trading For example if you are doing gap trading, then you would track on your list the biggest gappers for the day and see their movement on a list so you can shuffle through them quickly and keep an eye on the rest

* Modify and update your hot list and stock groups frequently For example, if you feel that stock XYZ is doing nothing or is going sideways, remove it from your list and concentrate on existing list or do a search to see any "hot" moving stocks are available for potential trades

* Avoiding trades when unsure about the market It is better to keep capital for future opportunities than wasting it on uncertain positions A very important skill in trading is to learn to sit on your hands when you do not identify any high probability setups If you try to force a trade, chances are you will end up losing in the long run Also it is important to identify a choppy market as more often that not, you will get killed in the whipsaws

* Concentrating on one opportunity at a time This considerably minimizes trading risk and help in maximizing opportunities by increasing position sizes Instead of having 10-20 positions at a time, try to cut down to 5 or so positions so you can monitor them more carefully

* Limit the number/frequency of trades It is better to concentrate on one or two trades a day This depends on your trading setup If you trade off a 1 minute chart, the number of trades you will take in a day will definitely be more than trading on a 1 hour chart So trade on different time frames to see which you feel comfortable trading in

* Keep the risk minimum It is ideal to keep the risk possibility less than 1% of your account size This is probably one of the most important part of trading If you risk a fixed 10% per trade, you will bust your account if you have 10 losing trades in a row, and this is very possible

* Be careful with trading on margin High margin trades are better when you are sure about price direction

* Write down your trades Note how you profited from a trade and why you made loss from another And frequently go through them

As William Eckhardt said this in an interview, "If a trader doesn't know why he's losing then it's hopeless unless he can find out what he's doing wrong In the case of the trader who knows what he's doing wrong, my advice is deceptively simple He should stop doing what he is doing wrong If he can't change his behavior, this type of person should consider becoming a dogmatic system trader "

Daytrading can be lucrative if you do it properly Implement these high probability daytrading strategies and tactics and you will surely find yourself improving in your trading

Dave Lex is a full-time trader and trades the forex and the US stock and options market. He also constantly test and develop trading systems to share with the public. For more information on how you can get one of his high probability trading systems for free, go to http://ProvenTradingSystems.com]]>
Day trading is the most active form of trading having maximum trading risk It requires real-time news, quotes and charts Day traders practice many complex strategies for getting profited from the market Here are some simple tactics which can minimize trading loss of day traders, especially beginners Try to incorporate them in your daily trading plan and i believe you will see an improvement in your trading

* Concentrating on certain group of stocks or an industry Specializing gives traders a chance to study deep and find more profitable opportunities Know the characteristics of certain sectors or group of stocks and how it is affected by the market index For example, if you are trading Google, then you would want to be noticing the Nasdaq index Therefore if you have any long positions on and you see the Nasdaq index starting to tank, chances are that Google will likely follow the index in going down and you can refrain from opening a long position or close your current long positions

* Using traders systems with hot/short lists Then traders can find opportunities quickly and easily for stocks (or other instruments) they are trading For example if you are doing gap trading, then you would track on your list the biggest gappers for the day and see their movement on a list so you can shuffle through them quickly and keep an eye on the rest

* Modify and update your hot list and stock groups frequently For example, if you feel that stock XYZ is doing nothing or is going sideways, remove it from your list and concentrate on existing list or do a search to see any "hot" moving stocks are available for potential trades

* Avoiding trades when unsure about the market It is better to keep capital for future opportunities than wasting it on uncertain positions A very important skill in trading is to learn to sit on your hands when you do not identify any high probability setups If you try to force a trade, chances are you will end up losing in the long run Also it is important to identify a choppy market as more often that not, you will get killed in the whipsaws

* Concentrating on one opportunity at a time This considerably minimizes trading risk and help in maximizing opportunities by increasing position sizes Instead of having 10-20 positions at a time, try to cut down to 5 or so positions so you can monitor them more carefully

* Limit the number/frequency of trades It is better to concentrate on one or two trades a day This depends on your trading setup If you trade off a 1 minute chart, the number of trades you will take in a day will definitely be more than trading on a 1 hour chart So trade on different time frames to see which you feel comfortable trading in

* Keep the risk minimum It is ideal to keep the risk possibility less than 1% of your account size This is probably one of the most important part of trading If you risk a fixed 10% per trade, you will bust your account if you have 10 losing trades in a row, and this is very possible

* Be careful with trading on margin High margin trades are better when you are sure about price direction

* Write down your trades Note how you profited from a trade and why you made loss from another And frequently go through them

As William Eckhardt said this in an interview, "If a trader doesn't know why he's losing then it's hopeless unless he can find out what he's doing wrong In the case of the trader who knows what he's doing wrong, my advice is deceptively simple He should stop doing what he is doing wrong If he can't change his behavior, this type of person should consider becoming a dogmatic system trader "

Daytrading can be lucrative if you do it properly Implement these high probability daytrading strategies and tactics and you will surely find yourself improving in your trading

Dave Lex is a full-time trader and trades the forex and the US stock and options market. He also constantly test and develop trading systems to share with the public. For more information on how you can get one of his high probability trading systems for free, go to http://ProvenTradingSystems.com]]> http://www.exchangematters.com/forexblog/185/high-probability-trading-strategies-daytrading-tactics/feed/ 0 http://www.exchangematters.com/forexblog/184/stocks-trading-and-how-to-achieve-success/ http://www.exchangematters.com/forexblog/184/stocks-trading-and-how-to-achieve-success/#comments Thu, 26 Mar 2009 01:10:10 +0000 admin http://www.articlesinsight.com/Art/5544/263/Stocks-Trading-and-How-to-Achieve-Success.html
Some say that "Money is the root of all evil" but still, you can't deny the fact that you need money in order to survive in this world Without money, you can't buy food, shelter, clothing, and the other necessities of life If you want to live comfortably, you must have a stable source of income Aside from your job, you can also earn additional income through stocks trading

If you want to be successful in stocks trading, you must be involved in day trading because that's one way of earning huge profits For those people who don't like long term investments, day trading might work for you By investing in day trading, you can expect the profits to be reflected in your account the soonest possible time This is also the reason why day trading is very much popular these days

Like other trades, day trading also involves risks If it is possible to earn huge profits in one day, the chances of losing huge investments are enormous as well As a trader, you're not expected to remain active at all times Did you know that with a very good negotiation strategy, you can earn huge money in seconds, minutes, and hours? That is indeed possible but it will take time You should not rush things when you're studying the market Take your time because after careful and thorough market analysis, you can make a good deal It's up to you whether you will only make one transaction per day or several transactions

Studying market trends is also very important Some value of stocks tends to rise continuously and if this is the case, a trader may buy the stock with the hope of selling it at a much higher price later on

Before making any transaction, there are things to consider like:

1 Stocks can be very unpredictable If you want to buy a stock and hope to sell it at a higher price, you need to monitor or check the computer often Frequent observation is needed so that you can make an informed decision Your internet connection should be reliable so that you won't lose in any of your transactions

2 Beware of day trading because even if you earn huge profits today, there is still a possibility of losing even a larger amount in the days to come If you've committed mistakes in the past, you need to learn from them Risking your investments is not a good idea so try to be very careful with all your transactions, online or offline

3 You must be patient Again, you must always take your time and don't be hasty with your buying or selling decisions If you're unsure of a certain transaction, get out immediately

Indeed, day stocks promises a lot of profit to those who are willing to take risks but this doesn't mean that they can simply make uneducated decisions Investing in day stocks requires careful thought and analysis of the market trends, along with other factors

Try to consider the things mentioned earlier especially of you're into day trading Beginners need all the help they can get because day trading is not very easy Gather as much information as you can about day trading You can find a lot of information about stocks trading online Start your research now so that you will know how to conduct day trading and understand the processes involved

Caterina Christakos is an experienced investor and published author to find out more about trading the forex market go to: http://forexandcurrenciesexplained.com]]>
Some say that "Money is the root of all evil" but still, you can't deny the fact that you need money in order to survive in this world Without money, you can't buy food, shelter, clothing, and the other necessities of life If you want to live comfortably, you must have a stable source of income Aside from your job, you can also earn additional income through stocks trading

If you want to be successful in stocks trading, you must be involved in day trading because that's one way of earning huge profits For those people who don't like long term investments, day trading might work for you By investing in day trading, you can expect the profits to be reflected in your account the soonest possible time This is also the reason why day trading is very much popular these days

Like other trades, day trading also involves risks If it is possible to earn huge profits in one day, the chances of losing huge investments are enormous as well As a trader, you're not expected to remain active at all times Did you know that with a very good negotiation strategy, you can earn huge money in seconds, minutes, and hours? That is indeed possible but it will take time You should not rush things when you're studying the market Take your time because after careful and thorough market analysis, you can make a good deal It's up to you whether you will only make one transaction per day or several transactions

Studying market trends is also very important Some value of stocks tends to rise continuously and if this is the case, a trader may buy the stock with the hope of selling it at a much higher price later on

Before making any transaction, there are things to consider like:

1 Stocks can be very unpredictable If you want to buy a stock and hope to sell it at a higher price, you need to monitor or check the computer often Frequent observation is needed so that you can make an informed decision Your internet connection should be reliable so that you won't lose in any of your transactions

2 Beware of day trading because even if you earn huge profits today, there is still a possibility of losing even a larger amount in the days to come If you've committed mistakes in the past, you need to learn from them Risking your investments is not a good idea so try to be very careful with all your transactions, online or offline

3 You must be patient Again, you must always take your time and don't be hasty with your buying or selling decisions If you're unsure of a certain transaction, get out immediately

Indeed, day stocks promises a lot of profit to those who are willing to take risks but this doesn't mean that they can simply make uneducated decisions Investing in day stocks requires careful thought and analysis of the market trends, along with other factors

Try to consider the things mentioned earlier especially of you're into day trading Beginners need all the help they can get because day trading is not very easy Gather as much information as you can about day trading You can find a lot of information about stocks trading online Start your research now so that you will know how to conduct day trading and understand the processes involved

Caterina Christakos is an experienced investor and published author to find out more about trading the forex market go to: http://forexandcurrenciesexplained.com]]> http://www.exchangematters.com/forexblog/184/stocks-trading-and-how-to-achieve-success/feed/ 0 http://www.exchangematters.com/forexblog/145/currency-trading-he-s-just-not-that-into-forex-day-trading/ http://www.exchangematters.com/forexblog/145/currency-trading-he-s-just-not-that-into-forex-day-trading/#comments Mon, 02 Mar 2009 20:09:09 +0000 admin http://www.articlesinsight.com/Art/3811/263/Currency-Trading-He-s-Just-Not-That-Into-Forex-Day-Trading.html
To say forex day trading is not risky would be a lie because it is definitely the riskiest form of trading in the forex market, but you can make money if you know what you are doing and have the ability to contain your emotions in this high paced environment The risk and tempo are what keep a lot of people out of this aspect of it and going the long term way

I once had a student Alvin who attended my forex training course and one day, he asked me if he should go for forex day trading using the forex scalping methods I've thought him I told him forex day trading may be lucrative but may not be suitable for everyone I went on to analyze the pros and cons of forex day trading with him

Firstly, something that is a draw to forex day trading is the fast trading cycle Many traders like the rush and potentially, it could actually be more fruitful than long term trading Each individual trade may not make as much as a long term trade, but because you may be making 10 trades to every one of theirs, if not more, your profitability can actually be higher than that of the long term forex trader

Another drawing characteristic of day trading is that you do not have the overnight worries of the long term trader Your money is out of the market at the end of the day and if anything happens to affect the currency of a certain country, you just roll over and go back to sleep The long term investor will be chewing on their nails waiting for the market to reopen

Of course, with any positive there are negatives that have to be considered The first of these is that the plain fact of the matter is that about 4 out of every 5 people that day trade end up losing money There are several reasons for this One of them we have already mentioned in the risk factor and another is that traders are pulled in by the lure of making very fast money and don't do the work that is necessary to be a successful day trader

Also, a lot of the people that are day trading are doing so on borrowed money They are leveraging against their forex account and they end risking too much on one trade and then they end up in massive debt when a trade goes bad It is not the forex market that is causing this, it is the trader that is not putting in the necessary work and effort to be an effective day trader

Another thing about forex day trading you should know is that it will take up quite a fair bit of your time as you need to monitor the forex market very closely Some part time forex traders overcome this by using automated forex trading system that trades for them

If you're having a full time job, it can also be quite distracting Having heard my analysis, Alvin said he's just not that into forex day trading as he has a full time job and he does not have the time to monitor the forex market Also, he said he does not need the extra excitement as his job is already stressful enough for him

If you are still interested in day trading and have the time, give it a shot, but just do it conservatively There are plenty of very successful day traders, but they take the time to create a successful forex day trading system that works and gives them an overall profit day in and day out If you find that it is too much for you, just explore the long term aspect of this market niche as there is plenty of money to be made!

To learn more forex tips and get trading signals, click here to download my FREE 56-page ebook Forex Trading To Riches.
The author, Daniel Su, is the founder of ForexTradingPower.com where you can get free premium forex trading tips and resources.]]>
To say forex day trading is not risky would be a lie because it is definitely the riskiest form of trading in the forex market, but you can make money if you know what you are doing and have the ability to contain your emotions in this high paced environment The risk and tempo are what keep a lot of people out of this aspect of it and going the long term way

I once had a student Alvin who attended my forex training course and one day, he asked me if he should go for forex day trading using the forex scalping methods I've thought him I told him forex day trading may be lucrative but may not be suitable for everyone I went on to analyze the pros and cons of forex day trading with him

Firstly, something that is a draw to forex day trading is the fast trading cycle Many traders like the rush and potentially, it could actually be more fruitful than long term trading Each individual trade may not make as much as a long term trade, but because you may be making 10 trades to every one of theirs, if not more, your profitability can actually be higher than that of the long term forex trader

Another drawing characteristic of day trading is that you do not have the overnight worries of the long term trader Your money is out of the market at the end of the day and if anything happens to affect the currency of a certain country, you just roll over and go back to sleep The long term investor will be chewing on their nails waiting for the market to reopen

Of course, with any positive there are negatives that have to be considered The first of these is that the plain fact of the matter is that about 4 out of every 5 people that day trade end up losing money There are several reasons for this One of them we have already mentioned in the risk factor and another is that traders are pulled in by the lure of making very fast money and don't do the work that is necessary to be a successful day trader

Also, a lot of the people that are day trading are doing so on borrowed money They are leveraging against their forex account and they end risking too much on one trade and then they end up in massive debt when a trade goes bad It is not the forex market that is causing this, it is the trader that is not putting in the necessary work and effort to be an effective day trader

Another thing about forex day trading you should know is that it will take up quite a fair bit of your time as you need to monitor the forex market very closely Some part time forex traders overcome this by using automated forex trading system that trades for them

If you're having a full time job, it can also be quite distracting Having heard my analysis, Alvin said he's just not that into forex day trading as he has a full time job and he does not have the time to monitor the forex market Also, he said he does not need the extra excitement as his job is already stressful enough for him

If you are still interested in day trading and have the time, give it a shot, but just do it conservatively There are plenty of very successful day traders, but they take the time to create a successful forex day trading system that works and gives them an overall profit day in and day out If you find that it is too much for you, just explore the long term aspect of this market niche as there is plenty of money to be made!

To learn more forex tips and get trading signals, click here to download my FREE 56-page ebook Forex Trading To Riches.
The author, Daniel Su, is the founder of ForexTradingPower.com where you can get free premium forex trading tips and resources.]]> http://www.exchangematters.com/forexblog/145/currency-trading-he-s-just-not-that-into-forex-day-trading/feed/ 0 http://www.exchangematters.com/forexblog/124/fx-trading-fast-and-furious-can-you-make-money-forex-day-trading/ http://www.exchangematters.com/forexblog/124/fx-trading-fast-and-furious-can-you-make-money-forex-day-trading/#comments Fri, 20 Feb 2009 05:33:44 +0000 admin http://www.articlesinsight.com/Art/3262/263/FX-Trading-Fast-and-Furious-Can-You-Make-Money-Forex-Day-Trading.html
Forex day trading is a type of trading that a lot of currency traders get involved in This is especially so for those who are looking for quick profits Some traders also like the fast and sometimes furious (especially when they are losing money) pace compared to other forms of forex investments

When you break it down, it would seem a little curious because the profitability earning has a higher percentage than long term investments, but it is the risk of day trading that keeps most investors away from it

While it is risky, there are certain advantages to forex day trading because of the speed of the trading cycle In essence, you are taking advantage of daily trends and trying to get in and out quickly while still making a decent profit You may not make as much as a long term deal, but due to the fact you're making a lot more deals, it can be just as profitable

Another positive of forex day trading is that you are not exposed to the moves of the market after it shuts down like the long term investors are You are in and out of your trades on a daily basis and can sleep easy at night knowing your profits are in the bank

Nowadays, there is a proliferation of forex trading software that claims to generate forex signals with very high degree of accuracy Some of these so called automated forex trading system can even do the trade for you Do not trust everything they say Before you buy any of these forex trading software, make sure you visit some forex forums to find out what others have to say about them

However, it is not all strawberries and whipped cream with day trading There are estimates that about 80% of the traders that are involved in this segment of the market are actually losing money!

As we stated earlier, there is a much higher risk involved in day trading and a lot of traders simply don't understand this when they first dive in and are not approaching the forex market with a proven model that generates the right forex signals and they end up losing their shirts This is more than likely where forex trading will sometimes be talked about negatively

The fact is that a lot of the day traders are not actually trading with their own money They are using leveraged forex accounts and when they take a significant loss, they cannot meet their margins and they end up in debt It is not the market that is bad, it is the trader making the deals

The only true way to find out if day trading is for you is to try it out When you do this, make sure that you use a very conservative strategy so you don't fall victim to losing too much money if you find that it is not for you You can definitely make money day trading, but the fact is that this niche of the forex market is not meant for everyone

To learn more forex tips and get trading signals, click here to download my FREE 56-page ebook Forex Trading To Riches.
The author, Daniel Su, is the founder of ForexTradingPower.com where you can get free premium forex trading tips and resources.]]>
Forex day trading is a type of trading that a lot of currency traders get involved in This is especially so for those who are looking for quick profits Some traders also like the fast and sometimes furious (especially when they are losing money) pace compared to other forms of forex investments

When you break it down, it would seem a little curious because the profitability earning has a higher percentage than long term investments, but it is the risk of day trading that keeps most investors away from it

While it is risky, there are certain advantages to forex day trading because of the speed of the trading cycle In essence, you are taking advantage of daily trends and trying to get in and out quickly while still making a decent profit You may not make as much as a long term deal, but due to the fact you're making a lot more deals, it can be just as profitable

Another positive of forex day trading is that you are not exposed to the moves of the market after it shuts down like the long term investors are You are in and out of your trades on a daily basis and can sleep easy at night knowing your profits are in the bank

Nowadays, there is a proliferation of forex trading software that claims to generate forex signals with very high degree of accuracy Some of these so called automated forex trading system can even do the trade for you Do not trust everything they say Before you buy any of these forex trading software, make sure you visit some forex forums to find out what others have to say about them

However, it is not all strawberries and whipped cream with day trading There are estimates that about 80% of the traders that are involved in this segment of the market are actually losing money!

As we stated earlier, there is a much higher risk involved in day trading and a lot of traders simply don't understand this when they first dive in and are not approaching the forex market with a proven model that generates the right forex signals and they end up losing their shirts This is more than likely where forex trading will sometimes be talked about negatively

The fact is that a lot of the day traders are not actually trading with their own money They are using leveraged forex accounts and when they take a significant loss, they cannot meet their margins and they end up in debt It is not the market that is bad, it is the trader making the deals

The only true way to find out if day trading is for you is to try it out When you do this, make sure that you use a very conservative strategy so you don't fall victim to losing too much money if you find that it is not for you You can definitely make money day trading, but the fact is that this niche of the forex market is not meant for everyone

To learn more forex tips and get trading signals, click here to download my FREE 56-page ebook Forex Trading To Riches.
The author, Daniel Su, is the founder of ForexTradingPower.com where you can get free premium forex trading tips and resources.]]> http://www.exchangematters.com/forexblog/124/fx-trading-fast-and-furious-can-you-make-money-forex-day-trading/feed/ 0 http://www.exchangematters.com/forexblog/112/forex-trading-tips-5-traps-to-avoid-if-you-want-to-trade-the-news-in-forex/ http://www.exchangematters.com/forexblog/112/forex-trading-tips-5-traps-to-avoid-if-you-want-to-trade-the-news-in-forex/#comments Thu, 12 Feb 2009 19:56:34 +0000 admin http://www.articlesinsight.com/Art/2917/263/Forex-Trading-Tips-5-Traps-To-Avoid-If-You-Want-To-Trade-The-News-In-Forex.html
If you have been trading the currency market for a while, you'll know that there is money to be made trading forex news However, trading the news in forex does involve some risks and there are 5 major traps you must avoid before you can to trade the forex news successfully We'll discuss these 5 traps and provide some forex tips and forex trading strategies to use to counter these traps

Trap #1: Strong Market Reaction

Economic news releases and reports are forex indicators for future long-term movements for a currency pair But for short-term trading, the actual results and the forecasted expectations may create big move opportunities

Thus, when actual results came out the same as what the market expected, then there is high possibility that the market will not have a strong reaction It is the big gap difference between the actual release and the market expectations that causes the market to have a breakout or big movement

Trap #2: Generally Short-Lived

Most of the time, breakout opportunities from the news release are not a long term trend as the movement may only last for few minutes to few hours But still, it has to depend on the significance of the economic news release and the difference between the actual results and the forecasted expectations

Most traders are either using forex scalping or day trading when they trade on news releases One of the forex tips is to try not to trade during the release as the trade can turn against you in a short moment even after you caught a big initial move

Trap #3: Quiet Market before a Big Movement

The market may often poise for a huge movement when it is very quiet before some economic announcements or news releases This is because the market is waiting for those before deciding on which direction it is going

Traders are waiting for a right opportunity to jump into the market after the news reports are being released Thus, you should not react to any forex trading signals 2 to 3 hours before the news are released as the signals may be false and misleading

Trap #4: High Spread during News Releases

During news releases, a trading broker may guarantee that your trade will be executed, but none of them will guarantee a normal spread for you Forex brokers will widen the spread due to the lack of trading volume during the release EUR/USD is one of the currency pairs with tight spread, but I have seen it turning it into a 10 pips spread from a normally 2 pips during a news release

Trap #5: High slippage

You might experience slippage when there is a big move during news releases It means that your trade order will get filled at a different price instead of the price that you wanted For example, you might have set a limit order at 1 3000

But when the news release, the price shoot up 50 pips to 1 3050 So a slippage may occur and you will get your order filled at maybe 1 3020 instead of 1 3000 This is quite risky as the market may go against your trading plan

The above forex trading guide will be very useful if you are using a forex day trading strategy to trade news But in any case, I will not recommend news trading as it is very risky with the above considerations

To learn more forex tips and get trading signals, click here to download my FREE 56-page ebook Forex Trading To Riches.
The author, Daniel Su, is the founder of ForexTradingPower.com where you can get free premium forex trading tips and resources.]]>
If you have been trading the currency market for a while, you'll know that there is money to be made trading forex news However, trading the news in forex does involve some risks and there are 5 major traps you must avoid before you can to trade the forex news successfully We'll discuss these 5 traps and provide some forex tips and forex trading strategies to use to counter these traps

Trap #1: Strong Market Reaction

Economic news releases and reports are forex indicators for future long-term movements for a currency pair But for short-term trading, the actual results and the forecasted expectations may create big move opportunities

Thus, when actual results came out the same as what the market expected, then there is high possibility that the market will not have a strong reaction It is the big gap difference between the actual release and the market expectations that causes the market to have a breakout or big movement

Trap #2: Generally Short-Lived

Most of the time, breakout opportunities from the news release are not a long term trend as the movement may only last for few minutes to few hours But still, it has to depend on the significance of the economic news release and the difference between the actual results and the forecasted expectations

Most traders are either using forex scalping or day trading when they trade on news releases One of the forex tips is to try not to trade during the release as the trade can turn against you in a short moment even after you caught a big initial move

Trap #3: Quiet Market before a Big Movement

The market may often poise for a huge movement when it is very quiet before some economic announcements or news releases This is because the market is waiting for those before deciding on which direction it is going

Traders are waiting for a right opportunity to jump into the market after the news reports are being released Thus, you should not react to any forex trading signals 2 to 3 hours before the news are released as the signals may be false and misleading

Trap #4: High Spread during News Releases

During news releases, a trading broker may guarantee that your trade will be executed, but none of them will guarantee a normal spread for you Forex brokers will widen the spread due to the lack of trading volume during the release EUR/USD is one of the currency pairs with tight spread, but I have seen it turning it into a 10 pips spread from a normally 2 pips during a news release

Trap #5: High slippage

You might experience slippage when there is a big move during news releases It means that your trade order will get filled at a different price instead of the price that you wanted For example, you might have set a limit order at 1 3000

But when the news release, the price shoot up 50 pips to 1 3050 So a slippage may occur and you will get your order filled at maybe 1 3020 instead of 1 3000 This is quite risky as the market may go against your trading plan

The above forex trading guide will be very useful if you are using a forex day trading strategy to trade news But in any case, I will not recommend news trading as it is very risky with the above considerations

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The author, Daniel Su, is the founder of ForexTradingPower.com where you can get free premium forex trading tips and resources.]]> http://www.exchangematters.com/forexblog/112/forex-trading-tips-5-traps-to-avoid-if-you-want-to-trade-the-news-in-forex/feed/ 0