Trading during unexpected news – simple tip
When there is unexpected news we see the reaction from the markets. Airstrikes on Iran can be a good example.
There are a few ways you can trade during days like that. My favorite is to wait for a reversal move from one of pivot lines.
We can observe some panic/stronger moves during the first minutes or even hours.
Eventually, there will be a correction.
That’s why I check monthly pivot lines for a possible reaction from the price. You can go simply with support/resistance zones but I prefer monthly pivots (it can be Pivot line itself or R1, R2, S1, S2…).
Below you can see my trade from Friday. This is AUD/USD. I saw that after a strong selloff price was approaching the monthly pivot line. The entry was on the lower time frame, after confirmation that there is a possible move in other direction (up).
The point here is simple. When there is a stronger move because of some news – switch between time frames and observe monthly pivot points. On a higher time frame check how the price is reacting with pivots. On the lower look for an entry signal.
I should mention that I closed that trade on the same day. During days like that, I prefer to close it fast. I don’t want to leave it open, especially before the weekend.