News trading is profiting from global events (and news), like major economic announcements or political decisions, causing rapid asset price changes due to increased volatility
How do traders take advantage of news trading?
News traders use short-term styles like scalping and day trading to predict and profit from price changes driven by important news events.
They can either enter the market before the news release with a specific direction in mind or wait for the news to come out and react to the market's response.
Each approach has its advantages and risks, and the choice depends on your trading style, risk tolerance, and ability to adapt to market changes.
Some best practices include:
👉 Understanding the economic calendar
👉 Taking into account market expectations and forecasts
👉 Seeing the bigger picture
👉 Make rational investment decisions
👉 Trade liquid markets
👉 Don’t trade too big
👉 Be aware that slippage and higher spreads can happen
👉 Protect your capital
👉 Don’t trade on every news event
👉 Choose the right broker
For more details on best practices visit our article 'News Trading Best Practises' on our website!
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