How would you like the most non-committal answer ever? Does news trading work? Yes and no.
If you were thinking of trying to trade around the non-farm payroll report, I'd say that's great (if you want to lose money). It simply doesn't work.
I know that you've seen charts showing how much you could make. Somehow in real life it doesn't work. Also there is the fact that brokers really don't like that kind of trading. So they will play games with you to help you lose money.
It's like trying to beat the casino at craps. Sure you can get ahead for a while, but in the end you're going to lose. That's how it works.
Of course, there are other minor news events. These are happening all the time. However, you're not going to get rich trading them. In fact, you trade them just like you trade anything else.
Which actually defeats the whole purpose of news trading in the first place! Thus my answer that news trading works and yet doesn't.
It doesn't in the way the most traders think of it. It's financial Russian roulette. It's like playing an expensive lottery. It's a "join-the-millionaire-club-in-one-shot" kind of deal.
That kind of thing will backfire. Imagine your were a hedge fund trader. You have $50 billion that you are managing. Would you straddle the market just before something like NFP?
It's rather obvious, isn't it? Of course not. It's not a rational trade. It's a shot in the dark. It's hoping, not calculating.
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Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide
Source: www.a1articles.com
