Dear Trading Tips reader,
On Saturday, at the Forex 101 Workshop in Durban, an attendee asked a question which sparked an interest with the rest of the attendees.
“Out of the hundreds of news events, which ones are the most important to trade with?”
I could see by their faces that they all wanted to know the answer to this question.
Who wouldn't? Everyone wants to know which events they should watch out for when they trade.
I told them that I was going to discuss this answer in more detail at the Advanced Forex Seminar in October - Early November.
But I didn't just leave it at that…
Here's the brief answer I gave on the day…
News event #1: With trading shares – you only need this one news service
Whether you’re trading shares or CFDs on shares, forget about the traditional media news.
Forget about Business Day TV, CNN, Reuters etc… Their main goal is to hype up the news and distort the stories to make it more entertaining and sensationalised for the viewer.
As a trader, you’ll only need this one service when you trade shares or CFDs.
SENS (Stock Exchange News Services).
SENS will release live facts about companies WAY before the media channels ever will.
I’m talking about new listings, potential corporate take-overs, dealings by directors, interim and annual reports etc…
When you read SENS on a daily basis, you’ll know what’s going on with the companies that you hold shares or CFDs with.
News event #2: The first Friday of every month, watch out for the…
On the first Friday of every month, the Non-Farm-Payrolls releases at 8:30am in America.
This data will reveal to you and other Forex traders the numbers of jobs added or lost in the economy over the last month. But it excludes the farming industry because of seasonal hiring tendencies.
When Non-Farm-Payrolls comes out, it causes huge spikes in prices between different currency pairs.
Sometimes the news could be good for America or bad, but from my experience you’ll see massive moves and other times, you won’t even notice that the news event was released.
It’s best for you to avoid trading Forex when NFP comes out, because nobody can predict the unexpected movements in the currency pairs.
News event #3: Steer away from this deadly Forex bird
I’m talking about a Black-Swan event.
“Black swan events are typically random and unexpected events”
according to Investopedia.
I’ve heard different definitions on what a Black-Swan event is.
The best one I’ve heard is this one.
“A Black-Swan is where an external event causes a market, share, currency pair or any other instrument to move 10 standard deviations from the mean.”
To simplify this further, here’s what it says.
A Black-Swan is where an outside event causes the share or currency price to move 10 times higher or lower than it moves on an average day.
You’ll know when a Black-Swan hits, when you hear on the news how a currency or a share has dropped over 10% in a day.
These events generally hit the stock markets locally and globally. And hard!
This is where once again, the media hypes things up to scare even more investors. This will cause instant panic and result in a shock (up or down) to the share price.
And if you’re holding a share or CFD in the wrong direction, you could blow a big portion of your portfolio.
These black swans include,
Black Swan #1:
Black Swan #2:
Black Swan #3:
In 2008, we saw stocks and indices crash over 10% in just one day.
And on 9/11, we had the Terrorist attack with the Twin Towers, which sent a huge crash in stock markets world-wide.
These are two of the most memorable Black Swans we’ve had in the recent years.
If you get in or hold onto a trade during these Black Swan events, it could cause your portfolio to crash in a very short term.
So rather get out of ALL your trading positions when a Black-Swan hits, to keep safe.
This is only the tip of the ice-berg on how these events can impact your portfolio. If you’d like to know the intricate reasons how these events can impact your portfolio, I’ll explain everything at the Advanced Forex Seminar.
And because I don’t expect you to fly or drive down far distances, I’ve decided to present the seminar at Johannesburg, Cape Town and Durban.
Click here if you’d like to attend this essential Forex seminar.
“Wisdom yields Wealth”