Why let news get in the way of your trading?

So we had the FOMC this week and a list of other so-called ‘news announcements’, none of which I care to recall. In fact, whoever told me about them may as well have been talking to a vegetable. My mind was elsewhere. This is way end of day trading allows us to do. 

Thanks to the high reward, high probability and low frequency of the trading style, we can just celebrate any news announcement as an opportunity for our winning trade’s profit to be increased in a shorter space of time or for a losing trade to be eliminated in a short space of time.

Imagine you have a 50 pence coin where you have a 50/50 chance of it landing on heads or tails, but if you were right and it landed on heads you were to receive £20, compared to if it landed on tails and you were wrong, you will lose £6.66...if this was the case you would keep on flipping that coin! The probabilities would after all be stacked in your favour...

 

This is the reason I do not look at news – pure and simple. Worst case scenario it will lose me 1% and some slippage.  For the best case scenario, it will help perpetuate a 10:1 reward/risk trade in seconds, just like CHFJPY did for me in September with Swiss Bank’s intervention.

If the trader was intra-day trading and targeting higher probability, smaller reward trades then they would have every right to be attune to the news...but for us higher time-frame traders it's a different story!

Not having to worry about the news really make trading a peaceful occupation – I’m just surprised that not more people follow suite...I guess that society pre-conditions us into having to worry about unnecessary things no matter how minor they may be.