In foreign exchange and gold trading, news-driven market fluctuations are a double-edged sword. Although the market conditions after the news release may bring huge opportunities, they also hide high risks. Learning to avoid news-driven price fluctuations and seize high-win trading opportunities after the market stabilizes is a necessary skill for every trader.
Why should you avoid trading on news?
1. High-risk and volatile news After the release of news, the market often experiences volatile fluctuations driven by emotions. Such market conditions often deviate from the logic of technical analysis. For example, the volatile bearish pressure shown in the figure can easily lead to traders being swept out of the market or suffering losses due to reverse fluctuations.
2. Uncertainty increases Under news conditions, prices will overreact and then return to rationality. If traders rush into the market, they may not be able to accurately judge the price direction and may even miss real trading opportunities.
3. The trap of emotional operations . Faced with rapid price fluctuations, many traders are easily driven by market sentiment and make irrational trading decisions, resulting in unnecessary losses.
The correct response strategy in foreign exchange and gold trading
1. Areas to avoid trading During the violent fluctuations caused by news releases, traders should avoid participating immediately. At this time, market sentiment fluctuates violently, the trend direction may reverse at any time, and the risk is high.
2. Waiting for the key area to confirm In the figure, you can see that the price gradually enters a stable state after testing the previous key support/resistance level . At this time, it is a safer strategy to patiently wait for the price to confirm the important support or resistance area.
3. Choose a reasonable entry time When the price confirms the important area and the market gradually calms down, you can consider entering the market when the price pulls back. This method not only reduces trading risks, but also allows you to seize trading opportunities with a higher winning rate.
Case interpretation: Learn foreign exchange and gold trading skills from pictures
1. The sharp decline after the news The chart shows a sharp decline caused by the news. At this time, traders should avoid entering the market rashly, but observe whether the price trend can find support at the key support level.
2. Opportunity after confirming the support area. The price stabilizes after testing the key level and forms a pullback . This is the high-probability entry point that traders can focus on.
3. Analyze rationally and avoid emotions. Waiting for prices to stabilize before taking action through technical analysis can effectively avoid the risks brought by emotional trading.
The core principles of foreign exchange and gold trading
1. Risk management first. Never try to catch a rebound or chase orders during drastic fluctuations. Wait patiently for the market to calm down.
2. Technical analysis helps you identify entry and exit opportunities by combining key support/resistance levels and price action.
3. Trading rationally and refusing impulsive trading is not only a reflection of technology, but also a competition of psychological quality. Learning to wait patiently is more important than acting rashly.
Conclusion
Foreign exchange and gold trading is a high-risk, high-return market. Learning to avoid the trap of news and using technical analysis to grasp the high-win trading opportunities after price corrections is the key to long-term stable profits. No matter how the market fluctuates, traders should be based on rationality and discipline to remain invincible in the fierce market competition.
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