Economic Calendar Events Guide
Is Trading Economic Events Dangerous?

By Eyal Mor

There is no debate that economic events cause volatility. At the same time, we as traders need volatility. The only thing that is left to be asked, is if that volatility is dangerous.

Like many other things in life, it is not black and white. The answer is, it depends.

  • If you are not prepared - Probably the volatility will harm your account, even to buy in the right direction you must execute and manage the trade correctly. Please see this interesting blog post about trade execution.
  • If you are well prepared - This means studying different scenarios of past releases, and trading only the events with significant market reaction (not the ones considered to be the most important events). Then you could be very successful. You can harness the expected volatility and the recurrence of economic events to your favor.
With the right preparation and methodology, a system of trading rules, and the right tools, economic events are a good opportunity.

Takeaway

Trade only the events with significant market reaction, not the most important events. GDP is an event with a high priority, but it does not mean that the market will react with significance to this event. If that is the case, we as traders should avoid trading it, even though it’s considered to be an important event. We need to trade where we have an edge, not just volatility.

Next post >> How To Trade economic Events

This is part of my series on The Essential Guide to Trading Economic Events . Here is the full list of posts in this series:

  1. Introduction
  2. Understanding Economic Events
  3. Which Markets And Asset Classes Are Most Affected By Economic Events?
  4. Why Trade Economic Events?
  5. Is Trading Economic Events Dangerous?
  6. How To Trade economic Events
  7. After Release - Real Time Analysis
  8. Where is the opportunity? Which markets offer the best odds?
  9. Trade Execution
  10. Conclusion
  11. How To Get Started
  12. Three Things To Keep Your Eyes On

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