When they say dont trade during news event..?

Quoting wsmokah

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I am fairly new to Forex and FF, so I'm really excited to make my first post here! I've been lurking around FF for a couple of weeks now, reading many many posts from some of the greatest individuals here. I have a couple of questions that I hope someone here would be able to answer and I apologize if it has already been asked here before.

I've pretty much read everywhere that you should never trade during the news events. Any my first question is, what exactly does that mean? News events can sometimes trigger very volatile reactions as major players (banks/hedge funds) revalue their holdings. Does it just mean that we should not open any new orders during this time? Since you are new to forex, yes, you should not open any new orders at the time of a news event. I dont suggest trading the moment of the news but instead trade the momentum, there is a difference and after a while itll become clearer. Or does that mean that we should close our current orders AND not open any new orders? If you just opened an order 5 min before the news (why you would, I don't know) then yes you may want to consider closing it. If however you have been in the trade a while and have some profit it may be a good idea to pull up the stoploss.

Secondly, I've also read something about how you shouldn't trade on Fridays. To what extent should one follow that "rule," if you want to call it. It all depends on your plan. I dont open any new orders after 10 am EST, London is going offline and Asian wont open until Sunday, the markets are closing and the follow through just may not be there. Plus its friday, who wants to work late anyways!

Thirdly, what are the important news events that affect trading of currencies... where it can turn around or enormously affect a currency pair in large amount of pips? Anything in red on the main ff page, interest rate adjustments, central bankers speaking, retail sales, housing... etc.

I go to FF everyday and check their main page, which has the news event coming out for the day or week. Please excuse my ignorance, but how does one go about reading that? There is headings such as "Actual/Forecast/Previous" ..what does all that mean? Actual is what you are waiting for, Forecast is what the analysts are expecting the number to be, if it is drastically different then expect much volatility, and previous is what it was last time that event happened. And then once again, which news events really affect trading? If you click the folder dropdown it will tell you more info on the news item. I know that there is the "level of impact" icon beside each news event - red, orange and yellow. So does that mean that every time there is a red icon, we shouldn't trade that currency pair during that time? It doesnt mean you shouldnt trade it, just that you should be more cautious. And if that's the case, then how long should we wait before trading that currency pair? When do the charts and your trading plan tell you to get in.


I know that those are a lot of questions and I appreciate anyone taking the time to answer them for me. Just like everyone else here, my goal is to become an excellent trader and minimize my losses as much as possible. I'm in this business to stay so I want to take the advantage of all the knowledgeable fellows here who are willing to help starters such as myself.

Cheers

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