Think of this: Do you have the experience to see where the REAL support and resistance areas are on a chart.
When I started trading, I was all about the news. Frequently, I would get a trade going well....for say 15-20 pips. At this point, it would suddenly reverse direction on me, and I couldn't figure out why.
Taking a look at a daily or 4 hour chart can tell you these answers.
However, you also have to realize that some of these "trades" have nothing to do with the number, it might be IBM buying Euros to pay German employees. (Granted, I am sure they have a hedge trader to cover expenses and to buy EUR on the cheap, but you get my point.)
I think the very fact that some of the larger transactions are out of NECESSITY is lost on traders.
Besides, just because a number is good, doesn't mean it will go up. You often see a spike, then nothing. So now you are in hole 30 pips, and for what?
News trading is OLD NEWS. Your broker will more than likely do whatever it can to make sure it hurts you. (Yes Virginia, your broker isn't your friend.)
I am sure this post really hasn't helped, so just do yourself a favor, and don't do it. That's all you need to take from this message.
You obviously haven't read these forums very thoroughly.
There are two things you can learn by reading these forums:
1) DON'T TRADE THE NEWS until you have a lot of experience.
2) Most of the newbies who try to trade the news do so because they figure it's a quick way to make easy money. What they don't seem to understand (because they don't listen to the advice of experienced traders) is that it's also a quick way to LOSE all your money.
Prices move very quickly during news releases. Stops are rarely filled and, quite often, are skipped completely because the price jumps drastically. That's right, JUMPS. I don't mean it moves past your Stop, I mean it jumps right over it and never touches it, so you don't get filled and you lose all your money.
Don't believe me?
Read through the forums and witness the number of people whining about how their broker ripped them off by not honoring their Stop during the news. Notice how they complain about the very thing that they were warned about.
Do yourself a favor. Don't look for the so-called quick buck. Learn to trade profitably on whatever time frame you're comfortable with. Stay away from the news, and keep your money.
Yeah, you definately need to learn how to trade before you consider trading the news. I know it sounds like easy money, but as many have already said, that is not the case at all. A lot of the people who trade the news spikes and are successful have very quick news services which are expensive. Newbie news traders nearly always end up blaming their broker for not filling their order properly.