NEWS DARI TOM..
Selamat men DIGEST
One of the hardest things to get used to when trading economic reports is being completely prepared for a report only to find the actual numbers come in very close to expectations and we have to scratch. Most people will rationalize it somehow and take the trade even though their parameters were not hit. They end up losing more than winning.
I know it is hard to get used to walking away for the day without a trade. Maybe the only way to really grasp how much of a crapshoot this type of thinking is, will be to lose until it hurts. Most people learn how to trade properly when they have lost everything. Sad but true.
Triggers exist because market reaction becomes very hard to predict without determining a sufficient deviation from expectations. As you can see from the historical spreadsheet or the newstrader program, there has to be X amount of deviation before we see a clear, sustained and directional movement. Too close to what people expected and you get nothing. Nada.
There are factors to consider when deciding to disregard the numbers you have prepared for the trade in order to come up with a decent consensus figure. The importance of the economic report you are about to trade is one. What is the prevailing trend for the morning and could that report with that number be responsible for turning the trend around? Does the broker make a sucker play after the numbers? Etc.
So many people just shoot out a trade on anything. Brokers have gotten used to moving the market in the opposite direction and taking out the weak traders. The tricks on news traders the broker may have in play has to be considered as well. Brokers, since they know the number and the report isn't much different from expectations also know where your stop is. They just move the market and then bring it back. Whipsaws, Whiptards and all round pissing with price is common using forex brokers. Sucker plays.
The brokers can move it back and forth, but at some point they have to follow the real market.
When I set my trigger numbers (deviation from expectation to produce a clear, sustained, directional move) I try to be flexible, but logical. It shouldn't matter if I have been waiting and preparing for hours for the report. If I think It may deviate a bit, then I will make a note of my adjustment on the sheet prior to the trade when my emotions are not running high. If it isn't on the plan sheet, I don't trade. If something buggers up and something happens like the numbers aren't clear, or the revision is way off or totally unexpected, then I don't trade.
The times a broker pulls a Whiptard,( meaning they run the price the opposite way), then you have to have the ability to look at the price and tell yourself that now is the time to buy more. You are getting a premium price. They moved it the opposite way because they knew people would bail out and very few people know enough to take advantage of the super price they are now offering. While everyone is jumping out, we jump in. Considering what has been happening to news trades lately, the retard move is an entire system of trading these days.
Weak hands and the bandwagon theory dictate the suckers will jump or bail in a flash. Give me the opposite side of any beginners trade. Just think like the broker. Act like the broker. They are just a player in this crazy market. Following the big boys on the stock exchange is a common tactic. In forex trading, why not do the same?
Remember, we are trading short term reactions to the differences in expectations. Make your trade and get out and get away. Do something else until the next report. We only need a dozen good trades a month and there is always another opportunity around the corner.
Tom
