The professional stock traders love to deal with the news. To them, news trading is one of the most efficient ways to make a profit. As a currency trader, you might not have the basic idea of how this market work, but if you look at the stock market, you notice that people are always buying the deep and selling the high. But this is the out scenario of the market. Those who are making money are always doing the opposite. For instance, many big players shorted Great British Pound during the Brexit event and made a huge fortune. They have taken advantage of the major news to improve their performance.
Taking advantage of the major news is tough. But we have decided to give you some precise guidelines that can help you trade the stock during the major news.
Trade the major stocks only
The selection of your trading instrument is very important. If you want to survive as a stock trader, you must select the right instrument and take the trade with discipline. People don’t spend enough time selecting their major instrument. Many of us trade the penny stock market with the hope that we will make a great profit by taking advantage of the market volatility. Penny stock can offer you a life-changing opportunity but it can also wipe out your account.
To be on the safe side of trading, you must trade only the major stocks. Choosing a major stock has one key advantage. The big players can’t manipulate the price with some blush news. The news is authentic most of the time and if you can match with the technical level, you might hit a home run. Never try to trade this market without knowing the stocks properly. Study the portfolio of that company so that you can end up with a decent profit at the end year.
Use technical and fundamental data
Those who prefer CFD trading with Saxo, always suggest using technical and fundamental data in stock trading. The benefit of using technical and fundamental analysis is enormous. The technical data will help you to find the exact entry point for the trade and the fundamental data will give you the moral confidence that the price will head to a certain direction for a prolonged period. But both of this analysis is a very tough task for new traders. You should spend at least three months learning technical and fundamental details before you can expect to take any trades in the stock market.
Time is a luxury new traders can’t afford. They jump into the investment world without even thinking about risk exposure. They intend to earn a huge amount of money based on the news. But the news can be rumor and the price might not react to it. When this happens, you will lose money in that particular trade. Get used to this sector before you invest a decent amount of money in it.
Get a professional trading edge
To trade the news, you have to get a professional trading edge. Taking trades by seeing the data is not the way a professional trader will trade. They will analyze the data and focus on the key level of the market. They will think twice before making any investment. Like a professional trader, create a trading edge that will allow you to trade the news like a pro. You can incorporate the price action trading method into the technical analysis. This will allow you to take high-quality trades most of the time. Most of the news creates a nice price action pattern on the chart. So, a skilled trader can easily take advantage of the major news by utilizing the technical levels in the chart.