Strategies for Trading High Impact News Releases
News releases have a huge impact on the financial markets, and savvy traders have long used news events to their advantage. Trading high impact news releases can be a lucrative strategy, but it is important to understand the risks involved. Here are some strategies for trading high impact news releases.
First, it is important to identify which news releases will have the greatest impact on the markets. Generally speaking, news releases that are related to economic indicators, central bank policy decisions, or government announcements will have the most significant impact on the markets. In addition, traders should also be aware of any news releases that could have a large effect on specific currencies, stocks, or commodities.
Once traders have identified the news releases that will have the most impact, they should focus on the timing of these releases. Many news releases are released at specific times, such as the US Non-Farm Payrolls report, which is released on the first Friday of every month. Traders should make sure to stay up-to-date on when these news releases will be released and plan their trades accordingly.
When trading news releases, it is important to have a plan. Traders should decide what their entry and exit points will be, as well as the size of their positions. It is also important to have a risk management plan in place, as trading news releases can be highly volatile.
Traders should also be aware of the potential for slippage when trading news releases. Slippage occurs when the price of an asset moves quickly and traders can’t get their orders filled at the expected price. To minimize the risk of slippage, traders should try to enter their orders as close to the news release as possible.
Finally, traders should also be mindful of the potential for news releases to be manipulated. This can occur when a news release is released early or late, or when the information contained in a news release is inaccurate. To protect against this, traders should be sure to only trade news releases from reliable sources.
By following these strategies, traders can increase their chances of success when trading high impact news releases. With proper preparation and risk management, news releases can be a profitable trading strategy.