Today, forex trading news is more plentiful than ever. There are numerous sources to choose from and there all delivered at the click of a mouse, so you can get breaking news whenever you wish.
Here we will look at how to use Forex trading news and mistakes to avoid.
First let’s start with a rather startling fact:
100 years ago 90% of traders lost and today the ratio still remains the same.
This is despite better more frequent Forex news, better computers, more powerful software and more information than ever on the markets.
The fact is knowing the news won’t help you win – in fact, it generally helps traders lose! There are 3 main reasons for this:
News is discounted in a split second.
In today’s world of instant communications news is discounted immediately, so by the time you have seen it and had a chance to act upon it, the moment has gone and the market is looking toward the future.
News is Stories
Those analysts are so convincing with their arguments! Their normally great at explaining what has happened – but you can’t trade off what they say, as they have no idea what will happen – there simply stories and opinions.
Will Rodgers once said.
“I only believe what I Read in the papers”
Now he was joking, but its surprising how many traders take what they hear on the news as a recommendation to trade.
News Gets Your Emotions Involved
Humans don’t like to stand alone and the news reflects what the majority want to hear but that is completely different from what you have to do, to trade to win.
The bulk of traders lose and the bulk listen to the news, so if you avoid it, you can step aside and not let your emotions get involved.
If you do this, you can trade in a disciplined fashion and join the elite minority of winners.
If you use forex charts and simply follow price action, you are far more likely to be successful than you would be by following news stories.