In this version of the
news trade, the idea is to get into the trade as soon as the data
release breaks. The trader needs to have the ticket ready to go and
jump in. The risk here is of a whipsaw, where the price reverses.
This risk is not as high
as people think because when the news breaks, there is maximum energy
and the market will respond. The risk of no surprise does occur and
that results in a small move, causing the risk of smaller losses than
a whipsaw because essentially the price doesn’t move beyond a
previous range and there is little room for profits. But if you’re
on the bull or bear trade and it is a big move, you have the same
challenge ofwhen to get out. The advantage is that you are not
immediately wrong.
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Trading on the Break (the Bull Ride
news trading)
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