22:47 GMT+3 / 03.12.2023
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News Indicator: how to remove the "cream" in a fast market? Algorithm by steps.

NPBFX

News trading has attracted a huge number of traders in financial markets for several decades. Many beginners, when they begin to get acquainted with it, because of the lack of proper knowledge, make a typical mistake. They are trying to find a news indicator that will help to trade profitably during the news release. In fact, this is a misconception. There are simply no such indicators that can give a trader a clear signal to sell or buy an asset.

But high-quality, really useful news indicators exist. What they are and how to use them in trading on a fast market, we were told by the experts of the international broker NPBFX (NEFTEPROMBANKFX). The material, in our opinion, turned out to be really interesting. It will help improve trading results not only for completely "green" traders, but also for those who already have experience trading on a demo or cent account.

The principle of operation of news indicators. Top indicator "NewsWatcher"

The task of any news indicator is to notify the trader about all upcoming important news. Moreover, the information is displayed directly on the price chart in the MetaTrader 4 trading terminal. If earlier the trader needed to keep the economic calendar open and monitor events, now it is not necessary to do this. In order not to explain "on the fingers", we asked the experts of the NPBFX broker to provide for our example a working news indicator from the "fresh" on the market. So, meet the "NewsWatcher"!

News indicator "NewsWatcher"

This indicator is indeed a new development in the segment of news indicators. With its help, a trader can get all the necessary information that has a strong impact on the movement of quotations. These are data on the labor market, GDP, NFP, speeches of heads of state, inflation indicators, as well as other important macro statistics.

Among the main advantages of "NewsWatcher" are the following:

  • All macroeconomic events affecting the market are displayed on the price chart in the form of vertical lines.
  • As soon as "NewsWatcher" has drawn such a line on the chart, all the necessary information about the event is displayed in a separate window for the trader.
  • The indicator warns about news or an event 2 weeks before them.
  • Universal. It can work on absolutely any currency instruments.
  • There are built-in alerts that will not allow the trader to miss important news.

The indicator is paid, so let's give an illustration from the developer's website as a visual example.

NPBFX

The news indicator has a number of settings. You can choose the time, how many minutes before the news release, "NewsWatcher" will signal the trader. Another useful option is the ability to set the time zone. It is very convenient if a trader goes on vacation or a business trip, changing his geographical location.

In summary, it is safe to say that with the help of "NewsWatcher" you will definitely not miss any important economic event on Forex. Read about how to make maximum profit on the fast news market in the next section.

Trading strategies on news

As you have already understood, the news indicator will not give you a clear recommendation on whether to sell or buy an asset, how much to enter into a transaction, where to fix a profit, etc. It will only signal to you that an event is expected, and also provide some information about it. How then to trade on the news? NPBFX broker specialists offer our readers the following efficient algorithm.

1. Fundamental analysis of the upcoming event. Before the news is released, it is necessary to conduct a fundamental analysis. A brief hint is given by a news indicator, where previous indicators are indicated, if this is economic data, as well as the forecast of analysts. It is worth reading the latest opinions of the world's leading experts. It is also important to know how the market reacts to certain data. For example, there will be a meeting of the Fed. The rate was not raised at the previous meeting. In the upcoming one, the probability of its increase, according to analysts, is also extremely low. If the rate remains unchanged this time, it may weaken the US dollar. Consequently, transactions for the sale of American currency will be of interest.

2. Technical analysis using signals on the NPBFX Analytical portal. After conducting a full-fledged fundamental analysis and the probable forecasts of the movement of quotations obtained with its help, it is necessary to conduct a technical analysis. You can do this quickly and simply using the trading signals service on the NPBFX Analytical Portal. Let's briefly tell you what kind of tool it is.

NPBFX

Trading Signals is a software technical tool developed by NPBFX. You can find it on the Analytical Portal in the "Signals" section. Access to the Analytical Portal is carried out from the trader's Personal Account after registration on the broker's website. The algorithm of the service is based on the 10 best technical indicators, which are automatically analyzed every minute. As a result, a generalized trading signal is formed for the selected trading instrument – buy, sell or refrain from trading. A trader can choose not only any pair or asset of interest to him, but also a timeframe from M1 to D1. We suggest taking a look at the screenshot below:

NPBFX

For example, using a filter, we selected five major majors. If your news concerns, for example, the European currency, then it is justified to look at the trading signal for the EURUSD currency pair on the daily timeframe. The released economic or other news can become a good driver of further movement in the direction predicted by ten technical indicators.

3. Choosing a strategy for opening trading orders.

If, after conducting a fundamental and technical analysis, your forecasts have coincided, you can choose a trading strategy on the news. There are several options for how and when you open trade deals.

  • Setting pending orders. This strategy involves placing a pending order a few hours or minutes before the news is released in the direction of the expected price movement. When the news comes out and the price goes in the direction of the forecast, the deal is opened. Profit-taking can be done manually, or by using the Take Profit (TP) order. You can also set two pending multidirectional orders. However, this strategy is more risky, because two orders can work at once. Often, during the news release, there are strong price fluctuations in both directions, and only then the price goes in the true direction.
  • Opening a deal before the news. If you are confident in your forecast, then you can open a deal at the last minute before the news is released. This will allow you to enter at the best price, given that during the news release, the spread can significantly expand. In addition, in this case, the probability of price slippage is excluded. Naturally, if you trade on a real interbank, and the broker displays your transactions to counterparties. The profit is fixed, both manually and with the help of TP.
  • Opening a deal after the news release. Some traders prefer to open a deal immediately after the news is released, in the direction of market movement. This approach, in our opinion, is also quite risky. Firstly, after a few minutes, the quotes may turn in the opposite direction. When choosing a trading direction, it is better to rely on fundamental and technical analyses, rather than on the movement of quotations in the first seconds after the news is released. Secondly, the risks of slippage and spread expansion are multiplying. This can put an end to short-term trading, where the goal is a profit of a maximum of several dozen points.

Which strategy to choose for opening trade deals is decided by each trader individually. In our opinion, the most effective strategy with the least risks is to open one pending order in the direction of the predicted price movement.

Dry residue

If you are looking for a news indicator that will give you trading recommendations, then this is a mistake. As you have already understood, such simply do not exist. The maximum that you will get from the indicator is a brief information about upcoming events, as well as an alert in the terminal before they exit. Everything else falls on your shoulders, so you need to study technical, fundamental analysis and risk management. By the way, NPBFX broker has separate webinars on news trading. You can connect to them for free by going through a simple registration on the broker's website.

NPBFX

When trading on the news, an important role is assigned to the brokerage company through which the trader enters the market. The broker should have no restrictions on trading strategies, excellent execution of client orders, withdrawal of transactions to the interbank market and, of course, no problems with paying profit. Such a broker is our long-time partner NPBFX (NEFTEPROMBANKFX).

The company has been operating in the financial markets since 1996, welcomes absolutely any trading strategies of its clients. The company provides the best prices for news trading, in particular, the brokerage commission is 0%, Cashback is up to 60% of the spread. Trading assets of 5 markets are available from any STP account: FX currencies, stock indices, CFDs on stocks, cryptocurrencies, raw materials. The broker's liquidity providers are Tier 1 banks, as well as large ECN systems. NPBFX has never had any problems paying profits to its customers. Even under the pressure of sanctions, the broker flawlessly provides a full range of financial and information and educational services to its clients from Russia.

The minimum deposit to enter the real market is only 500 rubles, 10 US dollars, 10 euros. Register and you can open a trading account on the official NPBFX website.

17 November 2023



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