Why you should use price action signal in news trading

Price action trading strategy is based on the study of raw price data. The professional uses the different forms of the candlestick pattern to find the market next movement. It’s true that this system is extremely simple but many traders consider it as the best trading system. Even the scalpers in Switzerland use this system to execute high lot size trade with proper money management. Though there are many other ways of trading the live asset when it comes to price action trading, you will always have précised entry point. Most importantly the professional traders can easily set their stop loss while using this system. News trading is also getting huge popularity in today’s world. Many traders often consider it as the best moment to make a decent amount of money. But making a profit during the high volatility is extremely difficult. You need to have a perfect trading system only to trade the news.IN today's article we will give you some solid reason for using price action signal in news trading.

Filters the false spike

The market is full of false spike and the new traders are the most prominent victim of this. But when you look at the expert traders then you will notice that all of them are nicely avoiding the false trading signal. So how do they do so? The simply use the price action confirmation signal to trade the higher time frame. Some novice traders often say that they are also using candlestick stick pattern but yet they are losing most of the time. It’s only because they are doing their technical analysis in the lower time frame. When it comes to news trading you should always use the price action confirmation signal since it will save a huge amount of your money. Be advised that price action signal and price action confirmation signal is totally different. The aggressive traders use the price action signal whereas the conservative traders wait for price action confirmation candlestick after the formation of setup. So be sure that you trade after you get the confirmation signal in your trading chart.

Multiple time frame analysis

Among different trading system, price action trading strategy gives you the best opportunity to do the multiple time frame analysis. Before you place any trade in your Swiss forex trading account make sure that you have done the multiple time frame analysis to assess the quality of the trade setup. When it comes to news trading, the expert uses price action candlestick pattern in the lower time frame like 5 minute or 1-minute time frame. But they always use the higher time frame to find the key support and resistance level to find the possible entry and exit point. To be precise they use more than one-time frame to execute their trade which is often known as multiple time frame analysis.

Tight stop loss

Using a tight stop loss in news trading is very crucial. If you trade with the indicator based trading system then you will never be able to place a précised stop loss. But the price action traders have added advantage when it comes to placing the protective stops in their trading account. They simply use the confirmation candlestick pattern to place précised stop loss. But if you are new to the financial world then we highly recommend you not to trade the high impact news release. You can use your demo account to master this trading skills and once your feel enough confidence in the trading news then use your real money to trade the highly volatile market.