I saw on social media some influencers explaining how you should be aware of the news even if you trade using only technical analysis. It’s good that this topic is mentioned, but the problem is that the education provided is at a very basic level and it can set you up for failure.
What you will usually hear is that you shouldn’t trade 30 minutes before and after a “high impact news”. This high impact news that is mentioned is the economic data you see on the economic calendar marked with a red colour (on the ForexLive calendar) or with a red folder (on forexfactory calendar)
There are a few problems here:
- The colour doesn’t mean anything.
- The economic calendar doesn’t show the unscheduled news.
COLOUR
There are times when the market is focused on a particular data point, and even if it’s marked as “low impact”, in reality it should be labelled as “high impact”. This is something that you can’t gauge by just looking at the calendar. You need to know the context.
For example, the Japanese wage data was marked as a low impact event back in Q1 2024, but in reality, it should have been marked as high impact because the Bank of Japan was focused on that data to decide on the timing of its interest rates adjustment. In fact, despite it being marked as low impact, it triggered big moves back in March 2024.
Moreover, different calendars can show different colors and they can even omit some very important data. For example, the forexfactory calendar, which is the most used one by retail traders, shows just the US retail sales M/M and core retail sales M/M data for today. It doesn’t show the most important measure, the Control Group, which is included in the ForexLive calendar.
UNSCHEDULED NEWS
Another important thing that the economic calendar doesn’t include is the unscheduled news. These are news, reports, leaks and so on that can be known only if you use a real time news feed like forexlive.com
For example, the Trump failed assassination attempt was not a scheduled news, but it did trigger a huge rally in Bitcoin. That was the catalyst for the surge in prices and those who were on top of the news caught the move and made some nice profit.
Unfortunately, given the lack of education of most influencers, the reactions to unscheduled news are sold as “market manipulation” to retail traders. They get brainwashed with such theories and end up believing that if they lose a trade, it’s someone else’s fault.
If you lose a trade, it’s your fault. Be accountable.