Almost every beginner trader regards
the news, especially those big ones, to be a great opportunity to
profit. Yes, we cannot deny the sudden movement of a currency
whenever a big news has been released. But have you ever considered
its effect in case it didn't turn out the way you wanted it to?
Let's give a comparison. For example,
you're strolling around under the scorching sun and enjoying the
scenery of beach. While you were walking, you had observed that
there were some individuals who are still learning how to surf and
had just dipped in to test the waters. What would happen if those
novice surfers encountered a really huge wave? The main tendency for
those surfers to ride the huge wave successfully would be very slim,
right?
It's almost the same with the novice
traders. The news is like the huge wave. It's a great opportunity to
surf but inexperienced surfers, who still doesn't have the capacity
to handle the huge wave, might be tolled dearly. Big news requires a
deal of knowledge in economics and latest in order to be ridden
successfully.
The interpretation of its effect on the
value of a currency may differ depending on the knowledge and
experience of the trader. Often, newbies only look to its immediate
effect and only focuses on a particular currency. They usually fail
to perceive its chain reaction and ended up in a jumble.
What advice should I give to the
newbies? Be the observer first. It wouldn't hurt if you'll read and
observe first. Learn how things would go and never jump in without
the necessary knowledge.
Don't risk losing your capital even
though you may be sure the effect of an incoming news. Try to
forecast its effect but restrain yourself from trading. Observe if it
would turn out the way that you had foreseen it and do this
procedures a couple or more of times to prove that it wasn't just
sheer luck. In case your predictions were correct, you may now
proceed to devising your game plan and hope for the best. Good luck.
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