How To Trade During News Release Part 2
In today forex faq, we have a question from one of our fellow traders regarding trading during news release.
Below is the question:
When you enter a trade and the trade was stopped out by a news release, do you usually enter the same trade back?
In fact, this question is a continuation from the previous question that I have answered regarding trading during news release.
In case, you did not read about this post, you can read it from the link below.
From the example that I have shown in my previous faq session, it seems that the market spike down to hit my stop loss and then move back up to hit my target profit.
From that example, I have received several emails from readers asking me whether I will enter a similar trade after I got the trade stopped out by a news release.
For me, I will not enter a similar trade after my trade was stopped out as I trade entirely based on my trading plan. Since I enter a trade based on the plan and have my stop loss set which was stopped out due to the news release. I have to accept it as a losing trade.
Entering a similar trade is not part of the plan and who knows whether the price will continue to move down to stop out the new trade. Therefore having the discipline to stick to your plan even when you are losing is equally important.
Some of you may have the impulse to get back into the market after a losing trade as you are frustrated with the outcome and wanted to make back the money. By entering a trade on impulse usually leads to another losing trade which will pile up your losses.
That is why I emphasize a lot on trading the demo. You may have learned several reliable strategies from my Forex Street University Course, but if you do not have the discipline to stick to the plan, then you will not succeed with the strategies as well even though they have proven to work for me for years.
Trading the demo is a way to hone your execution skills and also train your trading discipline. So for those of you who are currently in my Forex Street University Course or in other people course, please spend at least 2 to 3 months trading the demo until you are able to trade profitably before you trade live.
For the question above, I have share with you my personal view. For those of you who has your views on this issue, please feel free to give your comments below as it will be very useful for other traders here in this community.