Today I would like to share a trade setup that was featured in the War Room ‘Chart of the Day section. I wanted to share this with the blog readers to demonstrate how you don’t need to follow the news calendar religiously, or let it effect your trading decisions to heavily. Some traders won’t trade if there is upcoming news, which in the off case can be warranted. I don’t even look at the economic calendar personally, I just let the price action be my guide and follow what’s going on via the charts.
In this scenario, a nice thick bearish rejection candle formed at an established range resistance. This was nothing more than a classic ‘range play’, shoring a price action signal from the range top, to the bottom boundary. When I posted this setup I didn’t even know the ECB was announcing anything.
What Happened Next
The price action trade triggered via the retracement entry most of us were looking to get in the trade with – Great. Then later on in the session, the ECB announced a drop in their interest rates. This news drove our EURJPY into very fast profits, netting around 1:4 risk reward.
I don’t know whether to call it a phenomenon, or just the way the market works, but time and time again I notice it is the case that when good looking price action signals form ahead of news like this, the news generally supports the setup and drives it into profit. Obviously this won’t always happen, but it happens a lot for me.
Are you tied up in front of the news calendar all day trying to trade the Forex news releases, and on the verge of calling your therapist. Hold the phone for the moment, check out our War Room Trader Membership package and consider learning how to trade with price action instead. I can guarantee you will find it a much less stressful way to approach your trading.
inderjeet
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