I want to get some opinions on what other traders do if they are in the trade before a scheduled news event.
Like today, shortly after open, I've determined market will go down, so I have short and I have exist 30 seconds before the news event at 9:55 AM ET. My profit at that moment was 6 ticks. What do you do if you were me?
Trading is a risky businness. Knowing this, if you evaluate the risk is worth considering the potential profit then go ahead take it. I don't think there is much to be said about it. Personnaly i prefer to stay on the fence as there are so many opportunities you can take without the added adrenaline.
For me, the radio is OFF. The TV is OFF. The internet news feeds are OFF. I care absolutely nothing about the news as far as trading goes. I trade what I see. By the time the news gets to me it's way, way, way too old to be of any use to me as a trader. Those who could take advantage of such information already have. I watch the same patterns repeat themselves week after week. After reviewing things at the end of the day, sometimes I see where a news event slowed down or sped up the market, but I don't want my decision making process to be influenced by news events. I tried that in the past and had very poor trading results. My current approach, so far, seems to be working well for me. No news is good news!
After all, it's what you learn AFTER you know it all, that counts!
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For me it depends on a number of factors, including instrument being traded, what scheduled news event it is, and how many ticks I am already in profit. If it's a Tier 1 data release and it's likely to influence the instrument being traded I would probably exit before the release, especially if unrealised P/L is < 10 ticks.
But if it's say a Tier 2 data release and unrealised P/L is say in the range of 20-30 ticks or more, I could decide to stay in the trade and see how that goes.
For instance, I would never be in a trade when NFP is about to be released
It would seem as if your current trading strategy is potentially not building in any bias or calculation as to how to data from the news release will play out. If that's the case, then probably best to just close the position.
However let's say for example that you knew for sure or a very high likelyhood that PMI data was going to come out at a 10% miss against consensus forecast. While everyone else might be surprised, you are not. If that's the case, why would you not hold the proper position ahead of time?
Or let's say you knew that EPS was a huge beat at 1.50 versus a consensus forecast of .75. Again, if you've done the homework and you feel the analysis is correct, get paid for the work.
If however, you're simply trading technicals and you have no edge when it comes to the fundamentals, then step aside and let the fundamental players make the valuation call, and after the dust settles and all the other technical traders have piled back into the market, then you get back to work.
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