I saw on social media
some influencers explaining how you should be aware of the news even if you
trade using only technical analysis. It’s good
that this topic is mentioned, but the problem is that the education provided is
at a very basic level and it can set you up for failure.
What you
will usually hear is that you shouldn’t trade 30 minutes before and after a “high
impact news”. This high impact news that is mentioned is the economic data you
see on the economic calendar marked with a red colour (on the ForexLive
calendar) or with a red folder (on forexfactory calendar)
There are a
few problems here:
The
colour doesn’t mean anything.The
economic calendar doesn’t show the unscheduled news.
COLOUR
There are
times when the market is focused on a particular data point, and even if it’s
marked as “low impact”, in reality it should be labelled as “high impact”. This is
something that you can’t gauge by just looking at the calendar. You need to
know the context.
For
example, the Japanese wage data was marked as a low impact event back in Q1 2024,
but in reality, it should have been marked as high impact because the Bank of
Japan was focused on that data to decide on the timing of its interest rates
adjustment. In fact, despite it being marked as low impact, it triggered big
moves back in March 2024.
Moreover,
different calendars can show different colors and they can even omit some very
important data. For example, the forexfactory calendar, which is the most used
one by retail traders, shows just the US retail sales M/M and core retail sales M/M data
for today. It doesn’t show the most important measure, the Control Group, which
is included in the ForexLive calendar.
UNSCHEDULED
NEWS
Another
important thing that the economic calendar doesn’t include is the unscheduled
news. These are news, reports, leaks and so on that can be known only if you
use a real time news feed like forexlive.com
For
example, the Trump failed assassination attempt was not a scheduled news, but
it did trigger a huge rally in Bitcoin. That was the catalyst for the surge in
prices and those who were on top of the news caught the move and made some nice
profit.
Unfortunately,
given the lack of education of most influencers, the reactions to unscheduled
news are sold as “market manipulation” to retail traders. They get brainwashed
with such theories and end up believing that if they lose a trade, it’s someone
else’s fault.
If you lose
a trade, it’s your fault. Be accountable.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
