EAs and trading bots have changed the concept of the traditional Forex trading business. Retail traders no longer need to spend hours analyzing economic data. The bots and EAs can take care of the fundamental and technical data with a high level of precision. Thousands of professional traders are using the EAs to automate a few segments of their trading strategy. Due to the efficient analytical process of the EAs, the expert often considers it as the best helping tool to trade the news.
In today’s article, we are going to highlight the top 5 reasons for which you must use the EAs while trading the news. Follow the tips of this article and take help from the EAs to become a professional news trader. Let’s dive into the details.
Reduces human error
Being a human being, you can’t analyze the complex data without making any mistake. As the market becomes highly volatile, it becomes very hard for the news traders to keep track of the rate of change in the price. In fact, they often fail to analyze the most important metrics as they focus too much on the news data. But if you automate a certain portion of the analytical process, you can reduce the human error to a great extent. For instance, let the EAs find the support and resistance level. This will allow you to focus on the news data and other important variables. Thus you won’t be under heavy pressure since you know a certain portion of the work will be done by the EAs.
Rumors and false spike
Rumors in the market might create insane spikes. These spikes act as the stop loss hunters. But if you create a unique EA that can compare the news with different reliable sources, it will be very easy to assess the authenticity of the news. After the news release, just by looking at the EAs summary, you can tell whether the news is valid or it’s just another rumor creating short term market volatility.
You have to be well prepared to deal with such rumors and false spikes. The only way by which you can ensure the safety of the capital is a risk management plan. So, never risk a huge amount of money while trading the key news.
Identification of the trend reversal
Reversal trading method is a very risky task. But some of the advanced news traders often use the EAs and take advantage of the major reversal. Right after the news data, the EAs analyze the fundamental data with the historic data and find the potential chance of reversal. To be precise, the EAs will do the fundamental analysis in this aspect.
You have to analyze the technical parameters and look for a reliable pattern that suggests an imminent reversal in the price. If your technical data matches the report of the EAs, you can trade the reversal with managed risk.
Fast execution of the trades
Some of the traders don’t have the skills to execute fast trades. But news trading requires fast execution or else you will never get the desired price. To solve this problem, you can create an EAs with your news trading logic so that the traders are executed without any latency. Though it requires help from professional developers it can save a huge amount of time and money. But automating the execution process has one major disadvantage.
At times, you have to close the trades early since the EAs only react to the statistical data. So, when there is a shift in the sentiment of the market, you have to manually close the trade.
Ensure relax trading environment
Everyone thinks news trading is a very hectic process. But what if we say it is one of the most relaxing ways to trade the market? Well, it depends on your trading bots or EAs. If you can create the EAs with perfect logic to analyze the key metrics based on the news data, your trading process will become much easier. In fact, taking the trade in the most complex market condition won’t be difficult at all. You will get plenty of time to analyze the important metrics of the market and this will eventually boost up the profit factors.
Trading should be done in a relaxed environment. Being a news trader doesn’t mean you will be always under pressure. Many elite traders in the world trade the major news yet they don’t have any stress. The only reason behind their relaxed trading environment is smart technology. So, learn to use the technology in the trading industry and boost your confidence level.