Many novice traders like to pay attention to the enormous amount of online news stories and try and trade off the information contained, however, this is a big mistake and that it is guaranteed to make you lose.
If you don’t believe the above consider this fact:
The ratio of winners and losers today, is the same as it was 50 years ago.
This is in spite of the progress in the news and in the distribution, and all the other tools that traders have at their disposal – the relationship has remained the same.
Because it will not help you to win!
Consider this: if the merchants made money listening to and acting on the news, then everyone would be rich and this is not the case.
Sure, the stories and the arguments sound convincing, but that’s all they are opinions and stories and the people giving these stories and opinions are NOT traders.
The market is a mechanism of discount and quickly reflect all the news instantly – is with a discount, and the market is looking towards the future.
Trade the news and Trade The Past.
Also, if you listen to the news that you are going to let your emotions get involved and trade with the herd and this is a bad place to be – more to lose!
Please note that the market the news is more bullish that the market tops, remember 1987 and the tech stock bubble? So, when it crashed, the news was out and out bullish.
The best way to trade is to ignore the news and use a technical approach to the trade. By doing this, you are going to see the reality of price as it is and act accordingly – this will keep your emotions out of your forex trading.
Will Rogers once said:
“I only believe what I read in the papers”
He was joking, of course, but the majority of traders base their forex trading signals on what they have seen in the news and then wonder why they lose.
There are a lot of news online, on TV and in the newspapers, saying that what has happened and for this it is very good, however, to tell you what is going to happen, it is of no use.
So if you want to win in the forex trade online do not pay attention to the news!