How to Trade the News Using the Straddle Trade Strategy
- What if you could earn money rapidly while not knowing whether the market would go up or down?
- As long as there is enough price fluctuation, it is feasible.
- When can you expect to see this fluctuation, if at all? When significant events, such as economic reports or central bank statements, are made public.
- Your first step should be to decide which news stories to invest in.
- We’ve already spoken about the most important recent news stories.
- In an ideal world, you would only trade after such reports were released since there is a strong possibility of a significant market move after their publication.
- Next, before the news announcement, you should check the range for at least 20 minutes.
- The range’s high point will serve as your upper breakout point, while the range’s low point will serve as your lower breakout point.
- Remember that a significant shift from the news story is more probable the narrower the range is.
- The entry levels will be the locations where the breakout occurs.
- You should issue commands here. Set your stops 20 pips below and above the breakout marks and your first targets inside the same range.
Straddle Trade
A straddle trade is a hedging strategy.
You want to engage in BETWEEN the trades.
The straddle technique positions you to profit from a price movement in either direction.
All that remains now is for the news to come out, so you may join the market either way.
Even if you are triggered in the expected direction, the price may rapidly reverse, causing you to be stopped.
Your second input will be triggered, and if it’s successful, you’ll be able to recover some of your money and make a profit.
In an ideal world, just one of your transactions would be activated, and the price would continue to increase in your favor.
You may expect a favorable outcome for the day if you follow the proper procedures.
The absence of bias is one of the main selling points of the no-direction bias strategy.
You care only about making money after the change has occurred.
Since you will be activated in either case, you may take advantage of additional trading possibilities.
Setting reasonable profit objectives should boost the proportion of successful trades, given that most news events have a limited influence on longer-term price movement.
Although this course does not cover every possible method for profiting from changes in news reports, the ideas discussed here should form the basis of any news trading strategy you develop.
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