News Trading. Is it worth playing during macro data?

News Trading - but is it really worth it? A new day of trading begins, we sit down to the computer with morning coffee, turn on the platform and do a morning press review. We also look at the calendar of macroeconomic events, which is full of important data from the world's largest economies. There are clear signs from our technical analysis that you would need to open some positions. But we see that there will be an important macro reading for the market in the afternoon.

What to do in that case? It depends. It depends primarily on the investor and his propensity to risk.

News Trading, small risk

If you are a cautious investor who wants to minimize trading risk at all costs, then instead of stressing too much, it is better to let go of trading around the hours of macro data publication. If this is very important data that can confuse the market, even forgive this day and go for a walk, shopping or sort out the outstanding matters.

Medium risk

On the other hand, an investor more prone to risk (although not excessively) may try to estimate whether this economic indicator can actually cause major changes on the market. If so, he may also try to assess whether his transaction signal will develop before the publication, so that the situation will be clear, i.e. either the position will end up in profit or will be thrown on Stop Loss. It may also be that eventually the position will still be open and the moment of data publication will be very close. Then it is best, if possible, to tighten the order Stop Loss, so that in the event of a dynamic jump in price, do not give away all the profit generated until then, or not expose yourself to a quick, severe loss.

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As the level of experience increases, it will be easier for us to estimate the probability of a given scenario occurring, which in turn will translate into a greater number of signals that will be implemented and better results while maintaining a low level of risk.

The risk is big

An investor with a high risk appetite will even wait for the publication of macro data. It is true that it is associated with the possibility of a price slippage in the execution of the order and the movement that is not very predictable, but also the probability of a large amplitude of price fluctuations increases, and this can bring large profits in a short time. As with any type of investment: greater risk - greater possible return on investment.

Risk at your own request

There are also strategies that are based only on the game macroeconomic data. There are many variants. Concluding orders immediately after publication of data, setting orders pending one way or two ways just before the publication of results, or playing in the opposite direction right after the first price move. This approach to trade involves a lot of risk because it is based on many unknowns, over which we do not have much influence, and the whole action takes place very quickly (after the publication of important news, the first market reaction does not take more than a few seconds).

Is such a game profitable? It certainly has its advantages. First of all, we trade at clearly defined hours and only for a few minutes and it is quickly decided whether we have earned or lost on this investment. However, looking at how often the readings differ from the economists' forecasts and how surprisingly the market can react to these data, it can be said that without a well thought-out strategy, it is closer to lottery than investing.

News Trading or not?

Everyone should determine what risk he is willing to take and it will depend on him whether we will be impatiently waiting for the macro data or to avoid being terrified like a fire.