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Essential preparations for trading the high impact news

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Essential preparations for trading the high impact news

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News trading is very popular in the retail trading industry. In fact, most of the elite class UK traders are making tons of money just by trading the news. They do all the necessary technical and fundamental analysis to ride the long-term market trend. If you want to catch the large market movement it’s highly imperative that you learn news trading. But news trading is very risky and many new traders have blown their trading account. Despite the fact, the popularly of news trading in the currency trading industry has not lost its glory. As a full-time trader, it’s highly imperative that you learn to trade the high impact news. But to do so you need to prepare yourself. There are some essential things which you need to do to trade the volatile market. Today we will give you simple guideline to become a profitable news trader.

Trade with the reputed broker

Choosing a reputed broker as a news trader is very important. Most successful prefers Saxo as their prime broker. Saxo is offering a high class trading environment to the UK professionals so that they can easily place a trade without any slippage or technical difficulty. Some of you might say that the cost of the high class broker is a little bit high. But it’s really negligible for the full-time trader. The successful traders often spend thousands of dollars on their trading environment so that they can do the perfect market analysis. It’s very crucial to your trading success. During high impact news, the market becomes extremely volatile in nature. And placing trades in the volatile condition is really hard. You need to have access to the professional trading environment or else you might experience heavy slippage. Not only this, you broker should also give your precise price feed so that you can do perfect market analysis without any major mistake.

Do the lot size calculation

Money management is the most important element in the Forex trading industry. The retail traders always trade without knowing the risk factors. They even risk more than 10% of their account capital to earn huge amount of money. But this industry is not for the gamblers or risk takers. You have assessed the risk factors before you take any major decision. If you don’t do so you will blow your trading account within a few months. Before you place any trade, do the lot size calculation. If the trade goes against you must know the maximum possible loss for that trade. If you try to use a mental stop for such trading system, it will never work in the long run. Try to use 1% risk in news trading since the predicting price movement in the volatile condition is extremely hard. Consider this as a day job and follow a strict trading routine to save your investment.

Stop trading the press conference

You should not trade during all major news. For instance, let’s consider the Brexit event. Those who have traded during the Brexit event has lost a huge amount of money. The market is not all stability and trading the market was just like pure gambling. You need to trade in favorable trading conditions so that you can easily assess the risk factors and make a huge profit. Some retail traders often try to make money during the press conference. But this is one of the biggest mistakes they can make as a new trader. Most of the time the market exhibit lots of false spike on such events. It’s better to stay on the sideline until the market gives clear clue to the traders.

By following these three simple rules you can easily become a profitable news trader. If you want to enhance your winning edge, incorporate price action trading system. It will help you to place big lot size trade with a tight stop. But no matter what happens never take a huge risk in news trading.

Andy McGowan
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