How important is news for forex trading after all? Should you take it very seriously? XAUBOT Pro, When it comes to fundamental analysis, the questions are endless of course, but here we intend to answer a few of them that we deem to be very much so important.
This line of questioning and other similar questions fall under the purview of something known as fundamental analysis. This form of analysis will consider economic and geopolitical events that are released in the form of various news events and gauge their impact on the forex market to see how much they can move prices and what sort of volatility they can cause.
In this article we are going to take a look at the most effective strategy for stopping the trading operations in the forex market before the release of high impact news and how it can be executed easily with the help of XauBot Pro.
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Why Should You Take News Seriously in the Forex Market?
A good question to ask with regard to the impact of news in the forex market is, to what extent, if at all, should you take the impact of news on the forex market seriously? We shall now go through the reason as to why you should take news seriously in forex.
You see, different types of news, especially high impact news, can make price move in the forex market and cause volatility in prices. Of course as we said, depending on the strength and might of the news being published, the degree of the impact of news can be varying and different.
But in any event, when an important news is released, one that is categorized as a high impact news, it will indubitably cause volatility in the market. The way this volatility in prices is caused is directly through the uncertainty that such news leaves in the market.
You see, when an important and high impact news event is released, it will make traders uncertain about the next moves in the economy and even the world at large. This way, they also become uncertain about the foreign exchange market and how prices might move next. This is why, until such time that things have fully settled down, the situation in the market will remain uncertain and thus prices will experience uncertainty.
This is exactly the reason why you should take news seriously in forex. When there is volatility and when prices are acting unexpectedly, then you simply cannot make the right decision because you cannot depend on them. In this way, when you open a position, the trajectory will not remain as you had anticipated it would. When it eventually goes in an unexpected direction, then your position will end in loss.
So what is the best and most effective strategy to handle high impact news? The answer is discussed in the next section.
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What Is Stop Trading Before High Impact News?
After you have fully understood the importance of high impact news and the reason you should take it very seriously as it impacts your positions in the market, you now need to find out the best solution to handle such news.
Perhaps there is no other effective solution that comes even close to the feature and solution that XauBot Pro has provided for its users. As there are many different parameters that are pertaining to fundamental analysis integrated into this expert advisor, there is one particular feature that is directly related to high impact news.
This feature is known as stop trading before high impact news. As the name suggests, this feature will instruct the expert advisor to refrain from trading prior to the release of high impact news in the forex market.
This feature is not a fixed parameter where you would only have to set it as true or false. It goes beyond that. Other than having the option to choose to activate this feature or not, there are options to adjust it.
The way you adjust this parameter is through the figure that you can define for it. This figure will represent the number of minutes during which the expert advisor will refrain from trading before the release of high impact news.
For instance, this number can be set to 90 to 120 which will naturally mean that XauBot Pro will not trade for an hour and a half or two hours before high impact news is released.
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How Long Should You Stop Trading Before High Impact News?
So the most effective strategy to handle the market’s behavior before high impact news is to utilize the aspect of XauBot Pro that pertains to high impact news. As we discussed, this feature will instruct the expert advisor to halt its automated trading operations in the forex market for the defined number of minutes before the release of high impact news.
But how long should this stoppage be? Well, the fact is that you need to find the right balance of time. Because if the stoppage is too short in its duration, then your positions in the market will be overly exposed to the volatility that comes before the high impact news.
On the other hand, if the stoppage is overly long, then your approach would be too cautious and thus you would miss opportunities that need not be missed.
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Conclusion
High impact news can cause serious ripples in the market in the form of price volatility in the foreign exchange market trading pairs. But being a smart and intelligent trading solution, XauBot Pro also has a feature to handle this aspect of forex trading. With the help of the feature known as stop trading before high impact news you can easily manage the blow of such type of news.
