Trading on the financial markets can be a daunting side hustle. Or even a career. You can make a great living, or you can middle along, making small profits, while maintaining a day job. Either way, you need to develop a strategy that encompasses how to approach the market every day and how to profit from it. One strategy that works for some traders is news trading.
News trading is taking a look at the breaking news and information coming out of all the financial corners of the world. If you position yourself correctly, you can ride these bits of news to a profitable win. The key is timing and understanding. You need to have a complete understanding of whatever markets you are working in and at least a good overview on the global market as a whole. Everything is interconnected and affected by news from other sectors.
Being able to time your trades on news announcements is both an art and a science. It takes time to be able to figure out how to do it and how to make sure you are putting yourself in the right positon to profit. That is why screen time on trading platforms that allow you to practice being an active trader are very important to get good at trading the news.
Major news releases of any kind, not just economic announcements, can have a significant effect on the markets. Watching jobs reports for certain sectors of the economy can help you trade forex, but it can also help if you are looking to profit of the movement of stock indexes from companies in that sector. Looking at your charts just before a new release is coming out and then focusing on the minute by minute candles after the news comes out can give you a feel for how the markets are working. This is a combination of technical analysis and good old intuition.
Another key is to make sure that you have the right trading platform that will allow you to stay on top of trends in financial news and trade intelligently. Understanding how different trading platforms work and how quickly they can execute trades is very important to becoming a profitable trader. The fees and commissions that trading platforms throw down can also be a factor in which one you pick.
And it is not only financial news that can move the markets. Politicians making important speeches at international gatherings can have a profound immediate effect on the markets. That can be part of an active trading strategy. Leaders across the world are consistently making statements that affect policy, creating uncertainty and division within their own governments and regulatory bodies. All that is going to create volatility. And volatility is great for any type of active trader, no matter what market or technique.
The US non-farms payroll report is always an important monthly rollout that can have a profound immediate effect on the markets. The movement on that first Friday morning over every month provides a real opportunity for making money. And other global economic reports can have a similar effect on markets across the world. The European Union puts our regular economic reports detailing activity across their footprint, which can affect exchanges on the other side of the globe.
China is another huge player on the world stage that is becoming more and more important to investors and traders. While the economic growth of the country has been staggering in the past two decades, the Chinese government has infrastructure plans that could dwarf anything like it in human history. The doings the billion people in China are exceptionally important to traders in London and New York City.
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