News trading has always been one of the favorite approaches for novice traders. The novices in the UK traders might not have in-depth knowledge about the market but they love to trade in the volatile state. It’s perfectly okay to trade the news but without having the right set of skills, you must not take any trade on the major news. Especially when you are trying to deal with the precious metal industry.
We all know the price of gold, silver, and other precious metal is valued in the U.S dollar. So, a slight change in the value of the U.S dollar results in significant price movement in the trading instrument. You have to care about the news or else a wild swing in the price can cost you a big loss.
So, is there any balanced way to trade the precious metal market during news releases? Of course, the answer is yes. Let’s see how we can take trades in the major news by using the safety protocol of the investment business.
Open a low leverage account
Everything starts with the type of account you are using. Those who are using a high leverage account are not yet ready for the trade precious metal in the news. You have to choose a low leverage trading account so that you don’t have heavy buying or selling power. Everyone thinks it’s better to have some bigger buying or selling power but do you think it’s worth it. After a big loss, we become restless and try to take advantage of the leverage. This leads to executing unplanned trades and you will lose money. The ideal leverage for trading the precious metal is 1:10. And for taking trades during the news releases, the leverage should be 1:5.
The severity of the news
News trading always sounds cool. But the elite investors at Saxo markets trade on selective news. For instance, they are not willing to trade the FOMC meeting minutes because the chances of big spikes in both directions is very high. The course of the trend might get change when the FED takes drastic action. Based on the severity of the news, you should decide which news to trade and which news to ignore. Though it’s a challenging task for the newcomers this can be done in a very easy. Read articles on the types of news and you will know how to scale up the trade on such even.
Do you price action trading skills?
To trade precision metal, you must learn to find the price action signals. Even though you might not be taking trades in the news, without the help of the price action signal, it’s hard to make money as a trader. As a currency trader, you have to be concern about the quality trades you take in each trade. The best way to ensure high-quality trade execution is by using the price action signals. It seems tough to memorize all the reliable pattern but if you manage to find the correlation between the price action signals and the core of the support and resistance level, you can take some serious good trade even at the major news.
Analyze the news data
To trade precious metals, you should analyze the news data and mesh it up with the technical factors. By doing so, you will create a balanced way to look at the price action signals. But it is a complicated process as deciphering the major news data is a tough task. However, you can take help from the financial blogs or read analysis at the Saxo broker website to get a general idea. After blending the technical data with news data, you can take trades with low risk and expect to secure a decent return from the market.
