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Traders Sentiment and The News

Written by Pip Wrangler | one
Topics: Trading Tips

The movement in the currency market around news time is because of the way people perceive what the news is, not what the news actually is. From studying many experienced traders and my own observations, the fundamental movement from the news announcement is impactful but only temporary. The news will make a move based on a sentiment, then return back to the over all trend of the market.

To see an example of this take a look at an area on a chart where the market is trending in a 4 hour chart and mark the areas where a news announcement took place. Now look to see if it came into the overall trend of the market.

If the trend is up and the news drives the price down notice that it usually comes back up to the direction of the trend. When the news is up in an up trending market the price will go up faster many times at these points.

So if you trade the news one idea is to wait until the market makes a move between 5 to 30 minutes and you get some good signals to enter in the direction of the overall trend.

I hope this sheds some new light about trading around news time.

May 2nd, 2008
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Comments

One Response to “Traders Sentiment and The News”

  1. TK on May 2nd, 2008 7:13 pm

    reminds me of perception=reality. good insight, thanks

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