Hi everybody! Another trading week has passed. How were everyone's trading results last week? Comment to let me and everyone know!
As usual, I will continue to share the series of CHART CORNER articles
CHART CORNER 3: Handling news when trading according to Price Action.
Many of you are concerned about whether you need to follow the news when trading, because when news appears, the price will jerk sharply. To analyze this, I will analyze it in two different directions so everyone can have an overview:
DOES TECHNICAL ANALYSIS NEED TO SEE THE NEWS?
According to Dow theory, there is a part that all information from the past, present and future is fully reflected in the price (chart, candlestick).
Here it is understood as everything, from macro to micro, to investor psychology. And it includes time, past to future. Don't miss any element.
Technical analysis in general, especially Price Action, everything is shown on the chart, news, nonfarm, a few Tweets from Mr. Trump are just catalysts to have reflections on the price of each candle above. just a chart.
Everyone should read "How I Made $2 Million in the Stock Market?" If you don't buy the book, you can read the ebook, this book is also short so you can read it in just 1 day. I also reviewed this book before here.
So this perspective shows us that in theory we don't need to watch the news.
WHAT DOES WATCHING THE NEWS DO FOR YOU?
If you still think we should watch the news, let's discuss how watching the news will help.
The news reaching you has always been slow.
If you have ever heard the story about how the information network during the war made the Rothschild family rich, you will see how important news is.
Unfortunately, we are just ordinary people, so when news reaches us it has passed through many bridges such as: politicians, banks, foundations, people working in newspapers,... so what comes to you is it's too late.
Actually, before the news was released, the price had already run a long way. The news readers already had at that time, it was just time to release it to panicked traders or Fomo.
Can you analyze what the impact of the news will be?
There is a truth that I want you to look straight at: Even if you watch the news, can you analyze how that news will affect the currency pair you trade?
I myself have studied Macroeconomics and Microeconomics, but this analysis is only able to be analyzed by economic experts (and these experts specialize in analyzing to make money in the direction of investors). the force behind the sponsorship)
In the past, I often visited Kathy Lien's analysis at Bkassetmanagement. But the truth is that it doesn't have much effect, each expert will analyze the same news in a different direction.
Looking through the above two directions, we will see that everything is already shown on the chart, and even if you look at it, it will have no effect? So why do we have to waste time watching?
Eliminate the news, be confident in what you analyze on the chart. Your mind will be at ease and not scared by the market!
One thing people always need to remember is that stoploss is the mask that protects people from strong fluctuations caused by news. Every order has a risk of 1 -2 %, so even if the news is strong, it's no different than when you normally lose 1 order, but when we analyze in the right direction, it will bring us profits faster, even. Even the RR is larger.
Wish everyone a good weekend!
