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We continue studying the particularities of news trading The fact that the economic calendar is always available and the reliance on fundamental analysis not backed by in-depth study makes news trading very relevant. In the previous article we examined several possible options for the asset's behavior before important publications on macro statistics, the release of the results of central bank meetings or statements by officials. Just to remind: we talked about consolidation, rumor buying (selling) and finally about unexpected news. We will leave this last case aside right away: there can be force majeure in Forex and stop orders are mandatory unless you want to watch your deposit melt. In early July the AUD USD pair was actively depleting as a result of the expectation that the BRA would lower the key interest rate.
The reserve bank did so, but the aussie's reaction Mexico Mobile Number List was opposite to what is generally expected: it soared after a short-term decline. Thus, the principle "sell on rumors, buy on facts" was realized. Once the central bank announced its decision, the bears began to close positions. The downward movement was explained by the desire of unsuspecting traders to profit from the news, although in reality it had already been ruled out. To make sure this is true, you needed to look at the left side of the graph. The best solution in a situation where an asset is falling (growing) before an important event is to enter a position opposite to the initial market movement at the level of the beginning of this movement.
In the case of the Aussie, the return of prices at the opening of the bar allowed a long position to be formed. A protective stop order will be placed at the fluctuation low. Profit is determined by using harmonic trading patterns. AUD/USD News Trading Strategy LiteFinance: News Trading is a Powerful Forex Strategy | Litefinance If the central bank gives the market more than it wants, an asset can continue moving in the same direction after a major event. For example, the EUR/USD pair actively grew in early June, hoping that Mario Draghi would not hint at easing monetary policy. But the ECB, on the contrary, improved the inflation and GDP projection, while its president spoke of the strength of the labor market and domestic demand. In the end, the euro moved north after a small drop.
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