Here we will look at a simple way to use Forex news for bigger profits and it involves the reaction to the news not the news itself. Let's take a look at the strategy...
We all have the same news to look at but we all have our own opinion on it and we all draw different conclusions from it.
People should never try and figure out how bullish or bearish the news is because it's not the news by itself that's important, its trader's reaction to it that is. News is just opinions and stories and while we have faster, better and more in depth news than ever, the ratio of winners to losers remains the same as it did in yester year, so it hasn't helped more traders win. News reflects the majority opinion as well and don't forget the majority is normally wrong.
Markets always collapse, when there most bullish and rally when there most bearish, so trying to trade news stories is of no use but you can trade the news in a different way; by seeing how traders react to it and then executing your trading signal accordingly.
For example, if bullish news fails to push a market higher, this is indicating that prices will probably go the other way as the story is discounted and all you do is look at some chart resistance above the price and sell.
You will often here the old saying, buy the "rumour sell the fact" and it's very true and trading the reaction to the news is far more effective than trying to figure out how bullish the story is - that's just your point of view!
Will Rodgers once said "I only believe what I read in the papers" and he of course was joking but numerous traders try to work out how bullish or bearish a piece of news is which is impossible, when they should just look at the price reaction to it, to determine where prices may go next.
Look at how traders react to the news not the news itself, use technical levels to time your trading signals and you will find yourself trading confidently, against the losing majority and enjoying currency trading success.
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Article Source: http://EzineArticles.com/?expert=Samuel_Leslie_Berkovits
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