Trading the major news is a very difficult task. Most of the traders think only the skilled traders with years of experience can trade the major news. But things are not as hard as it seems. With the help of trading bots, you can easily deal with the high impact news. Most of the trades are executed based on critical support and resistance level. But the traders find it hard to trade the major levels since the market becomes extremely volatile in the event of the major news. To be good at trading, you need to learn technical, fundamental and sentiment analysis. And only then you will be able to make a profit.
What about the EAs? You might think the EAs are the ultimate solution of the naïve traders. But this is not the professional trader’s work. Just like learning to trade the market, you need to learn the use of EAs. Those who trade the market in a stable condition have nothing to worry about.
In fact, they can rely on the default settings of the EAs and make a decent profit. But things become a little bit complicated when it comes to trading the major news. Let’s find out the perfect way to trade the major news with the help of EAs or trading bots.
Analysing pivot points
Forex EA or trading bots execute the trades based on pivot point analysis. Most of the time, the traders are executed based on the higher or lower period. If you intend to operate the EA in the aggressive mode, the trades will be executed at the minor support or resistance level. On the contrary, when the bots look for potential signals in the higher period, trades will be executed at the critical support and resistance level. But this is not going to work when it comes to news trading.
The EA must focus on multiple time frame analysis techniques. If it focuses on some fixed support and resistance level, you are not going to make any profit. So, adjust the settings in the EAs in such a way so that it can find the potential trade setups based on the multiple time frame analysis. And if this feature is not available, you need to ask the developers to give you a solution to this problem.
Assessment of the risk
Risk assessment is the most important thing you need to consider while trading the major news. Most of the time, the EAs are executing the trades using the basic 2% risk management policy. But this might be the ideal case when you trade the press conference. You need to lower down the risk to 1%. The second thing that you need to consider is the stop loss.
EAs are designed in such a way so that it can limit the potential risk of losing a big sum of money. Since it uses tight stop loss in most of the trades, it becomes really hard for the traders to make a profit during the major news. Most of the trades are stopped out due to false movement of the price. So, adjust the lot size in such a way so that you can execute the trade with wide stops. But this might limit the profit factors still it is by far the best way to trade with the EAs.
Use manual trading approach
You can take huge help from the EAs and trade the major news with manual methods. For instance, the EAs will calculate the price movement and find the critical points for the trades. The traders will analyze the market variables and decide whether it’s a good option to execute the orders or not. However, this requires a strong knowledge of technical and fundamental analysis. To develop your technical skills you can start demo trading the market.
Demo trading account gives the perfect opportunity for traders to learn new things about this market. Once you feel comfortable with the demo trading experience, start learning about the major news. Learn to decipher the news data. The EAs will simplify the trade execution process by finding the potential trading spots during the news trading. To be precise it will save time and allow you to earn more money.
Trading with the bots is a very challenging task. Being human being we need to understand the limitations of the software. However, things have changed a lot and the Forex robots can significantly improve our trading performance. If you can follow the rules mention in this article, you can easily expect to make big profits in any market condition. In fact, news trading will become easier. However, if you lose a few trades in a row with the help of EA, backtest the EA and bring change to source code to improve its performance.