Beginner question...

Hello all!

I keep reading and learning about this wonderful business. I am also playing with my demo account. Still was not able to find a method that works for me. Tried a few methods that are posted in the forum, but had no success. Now Im trying to trade with news, which seem to have more logic that trend trading or just using a method that could be "ideal" in the theory, but impossible to apply in the practice and in the real world.

Yesterday at 11am (my time zone), the ISM Manufacturing Index was announced and it was possitive for the dollar as you can see in the graphic below. My question is why did the Euro started to grow again after 30 minutes? And it went back to it's original position.

Sorry for my newbie question, but I'm still learning!

Thanks.

http://img87.imageshack.us/img87/8104/40803891fk4.jpg

I think you (as a newbie) are starting at the wrong end of the time scales.
I know it's hard to understand what's going on in this business, but understanding how to trade the news (profitably) is probably the hardest. There are so many factors involved, and it takes more than a superficial look at the FF calendar to get to grips with this.
But, if you feel you must give it a try, stay with the demo for as long as it takes for you to feel you've at least a basic understanding of the market.
Here's a thread that might give you some insights as to why I would guide you away from this path at the moment.
There are some good trading methods, using daily/4hr charts, that you should focus on first, and a look around the Factory should indicate the most popular ones. Pick one and stay with it until you have it mastered, and maybe demo news trading in between as a way of finding the style that suits you in that difficult area.
Anywho, good luck with whatever you decide, we're here to help.

Here are some of my thoughts and observations on trading the news.
The movement in the currency market around news time is because of the way people perceive what the news is not what the news actually is. From studying many experienced traders and my own observation the fundamental movement from the news announcement is impactful but only temporary. The news will make a move based on a sentiment then return back to the over all trend of the market.
To see and example of this take a look at an area ion a chart where the market is trending in a 4 hour chart and mark the areas where a news announcement took place. Now look to see if it came into the overall trend of the market.
If the trend is up and the news drives the price down notice that it usually comes back up to the direction of the trend. And when the news is up in an up trending market the price will go up faster many times at these points.
So if you trade the news one idea is to wait until the market makes a move between 5 to 30 minutes and you get some good signals to enter in the direction of the overall trend.
I hope this sheds some new light about trading around news time.

Hi,

PeterFm is right, trading the news is probably one of the toughest methods. When I was a beginner in forex trading, I thought by mastering how the news release will affect the movement of price, I will be able to trade profitably.

Ok, long time ago when news are released, the market may move drastically and you can trade according to that. But now, it's not effective anymore and instead we should be avoiding trading the moment news are released and wait for 15 mins to 30 mins later for the sudden react to stabilize. We do not know know the expectations of the forex market and therefore can't predict how it will be moving until the whole market(banks and institutional traders) lead us to it.

If you are a beginner trader, find the trading system that suits you the best because different systems are cater for different individual's character. It's not just about a good trading system. Without good money and risk mangement, patience, discipline and ability to handle emotions well, a good trading system can turn into a losing one.

So take your time to learn and demo trade. Only when you can profit consistently, then you can go into live trading. Hope the above helps.


Regards,
Dan