Mindblown: a blog about philosophy.
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How to Trade News Using Straddle Trade Strategy
What if there was a way to make money quickly even if you had no idea whether the market would move up or down? It’s possible as long as there is sufficient price volatility. And when can you get this volatility? When news like economic data or central bank announcements is released! The first thing to…
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How to Trade the News With a Directional Bias
Let’s now see how to trade the news with a directional bias in a trading scenario. Let’s go back to our example of the U.S. unemployment rate report. Scenario: If the U.S. Unemployment Report showed improvement, why did the USD still weaken? Earlier, we gave examples of what could happen if the unemployment report came in light…
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2 Ways to Trade the News
There’s no single strategy for trading the news. When the news hits, the price tends to spike in one direction or has a muted reaction to the data as traders digest the outcome against market expectations. Knowing this, there are two main approaches to trade the news: a) Having a directional bias b) Having a non-directional bias…
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How to Trade Forex on News Releases
Before developing a ‘Trade the News” strategy, we have to look at which news events are even worth trading. You want to be able to answer, “Which news releases should I trade?” Forex traders should familiarize themselves with the key event risks that heavily impact the major currencies. Remember that we are trading the news because of its…
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Beginner’s Guide to Forex News Trading
As forex traders, it’s important to pay attention to major economic data releases, speeches from government officials, and geopolitical events. Why? Because this information usually reflects the strength of a given economy and may indicate the future direction of a given currency. Trading the news is often difficult and not be suitable for everyone, but the…
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News Makes the Forex Market Move
It’s not enough to only know technical analysis when you trade. It’s just as important to know what makes the forex market move. Just like in the great Star Wars world, behind the trend lines, double tops, and head and shoulder patterns, there is a fundamental force behind these movements. This force is called the news!…
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Summary: Market Sentiment
Did those thousand-pip moves excite you? Before we start betting the farm based on our analysis of the COT report, remember that those were just specific cases of when the COT report signaled a perfect market reversal. The best thing to do would be to backtest and look at reasons why a reversal took place.…
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How to Interpret the COT Report
Now that we know how to determine sentiment extremes, what’s next? Recall that not every sentiment extreme results in a market top or bottom so we’ll need a more accurate indicator. Calculating the percentage of speculative positions that are long or short would be a better gauge to see whether the market is topping or…
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How to Create Your Own COT Trading Indicator
Having your very own COT indicator is like having your own pony. Using the COT report can be quite useful as a tool for spotting potential reversals in the market. There’s one problem though, we cannot simply look at the absolute figures printed on the COT report and say, “Aha, it looks like the market…
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How to Pick Tops and Bottoms With COT Report
As you would’ve guessed, ideal places to go long and short are those times when sentiment is at an extreme. If you noticed from the previous example, the speculators (green line) and commercials (blue line) gave opposite signals. While hedgers buy when the market is bottoming, speculators sell as the price moves down. Here’s that COT report…
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