Trading the news is not gambling but a strategic approach that, when combined with technical analysis, provides a significant edge by offering fundamental context and understanding market drivers.
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If you've spent more than 5 minutes in
the online trading world, you've
definitely heard the classic trading the
news is gambling or to avoid trading
high impact news. But what if I told you
that trading the news isn't gambling? In
fact, it's the complete opposite. Now, I
know this sounds crazy as it's literally
the exact opposite of what most traders
have been told. So, let me explain.
First off, technical analysis is
extremely important and I use it every
trade I take. But relying on it alone is
where so many traders get stuck. Why?
Well, because as a retail trader, the
playing field just isn't very level. You
see, the banks, hedge funds,
institutions, they have more data than
you, more capital, more resources. In
other words, a trader that only uses
candlesticks, well, is going to get
eaten alive.
If you're watching this, you probably
already have a solid understanding of
how technicals work, which is fantastic.
You're already halfway there. All that's
missing is adding the fundamental bias,
the news. That context ties everything
together. Now, the news is a massive
umbrella. Everything from economic data
like CBI, NFP, job data, rate decisions.
Then you've got central bank speakers,
president comments, geopolitics, and
everything in between. Let's start with
economic data. This is what people are
probably most familiar with. And like I
mentioned before, it contains this type
of information. In simple terms, it's
like the statistics of an economy. Now,
yes, hedge funds and banks absolutely
have tools to build a rough picture of
what these numbers might be beforehand,
but no one knows for certain until the
official print drops. And the key thing
is when it does drop, everyone gets that
number at the exact same time. But wait,
you're probably thinking, I don't see
the number instantly. I have a delay and
by the time I get it, I've missed my
entry. Well, the reality is most
beginner retail traders are using
delayed economic calendars. One of the
most popular that I see talked about is
Forex Factory. While it's fine for
looking when a print is going to be
released, it is just super basic and
extremely limited. So, if you're
relatively new to the fundamentals, I
would recommend Financial Juice. And no,
I'm not getting anything from saying
this. There's no affiliate link in the
description. This is just something I
genuinely wish someone told me when I
first started. It has around a 15-second
delay, which is still quite a while. So,
when you take trading seriously, you
will need to invest in a high-quality
terminal with zero delay. But for free
and as a start, it's honestly really
great. Okay, so once you've got a
reliable feed of data coming in, the
real skill is knowing what to do with
it. You see, once a print released, the
markets are obviously going to move. But
how it moves depends on what that data
actually means. After all, the markets
react to new information. I mean, it's
literally in the word news, right? New.
Let me put it this way. Imagine there
are two people. Let's call this guy Info
and let's call this guy market. If info
tells market something he already knows
or something he just doesn't really care
about. Market is probably not going to
have much of a reaction. But if info
says something important and surprising,
market will definitely react. And the
bigger the surprise, the bigger that
Take this example, the RBA rate decision
on the 8th of July. Leading up to it,
markets are expecting a rate cut. But
instead, the RBA surprised everyone and
held rates as they were. The unexpected
print caused a massive surge in
Australian dollar strength. And even if
you didn't trade the actual release,
knowing what has happened and what's
unfolding helps you interpret future
price action. You might want to wait for
a pullback to trade the extension. Or if
the Prit is strongly bullish, you'll
know to avoid taking any sells even if a
perfect technical setup appears. This
understanding can not only help you
profit from the moves, but also keep you
from getting caught on the wrong side. I
like to think of it as fundamentals tell
me why and then the technicals tell me
when. Now, of course, not every single
print is going to play out perfectly,
right? But by following what the
fundamentals are telling you, you get
that extra layer of confluence because
at the end of the day, the fundamentals
are moving almost everything. And just
before I get into this trade, I really
want to stress that what I've covered so
far is just scratching the surface.
There are so many different nuances,
factors, different cases that I just
haven't touched on because it would make
this video way too long. So, please keep
that in mind when you're watching this.
But for now, let's jump into a trade so
you can actually see what I'm talking
about. Okay, we're on the charts. Let's
break down this trade on USD JPY. So,
this trade was primarily taken based off
FOMC meeting minutes, right? But before
I break that down, I want to quickly
explain what am I looking for in terms
of my zones, my key levels, um, and
everything kind of that nature, right?
My technicals. So, what I'm doing first
is I'm coming to a higher time frame,
right? Usually the 4 hour, sometimes
it'll be the daily, but yeah, most of
the time 4 hour. What I want to look for
is key levels, key zones, right? I want
to look at zones that you could almost
eye without having to um to draw your
key level there. Right? So, what I'm
going to do is I'm going to the 4 hour,
mark off my zones, come down to the 1
hour, mark off half an hour, 15 minute,
and then I'm usually going to stop at
the 5m minute. Right? Sometimes I will
go down to the 1 minute, but most of the
time it's the 5m minute. Okay. So, now
to FOMC meeting minutes. So, this
released at 4:00 a.m. in my time zone,
right? And I'm going to show you the key
uh I have them here. Here we go. the key
uh kind of notes from from this meeting
right and it is that majority viewed
inflation risk outweighing employment
risk. Some participants said it would be
not said it would not be feasible or
appropriate to wait for complete clarity
on the tariffs effects on inflation
before adjusting monetary policy and the
full effect of tariffs could take some
time. Okay, so these comments these
notes is probably a better way to call
them are hawkish, right? It's saying
that inflation risk is going to outweigh
the employment risk and it's going to
say there would not be feasible or
appropriate to wait for complete clarity
on tariffs. Right? We know that tariffs
are inflationary, right? Tariffs are
going to cause higher inflation. So
there's no point in waiting when we
already know that it's going to cause,
right? And obviously here the full
effect tariffs could take some time. So
it's all about um it's all about um that
inflation is a big deal, right? And as
you can see, this is obviously, like I
said, hawish. And we want to see some
bullish reaction from the US dollar. So,
if I come over here to the dollar, you
can see at 4:00 a.m. we do get that
bullish momentum, right? We actually
break out of structure, which is which
is what you want to see, right? As well,
if we come over to to the 10-year at
4:00 a.m. when this releases, we get
that bullish momentum as well. Now, the
reason why I'm trading USD JPY is
because uh when the when we have the uh
the bonds push up and the dollar pushes
up, this is going to push down the
Japanese yen, right? I'm sure most
people know that, but just for those who
didn't. So, that's why I told you JPY
with a lot of US data because it creates
that kind of perfect kind of scenario.
You have the US dollar strength, the
Japanese weakness or the complete
opposite way around, right? So, I have
my fundamental bias in this situation
which is a bull a bullish bias, right?
hish comments, bullish bias. I want to
see USD JPY push to the upside, right?
But I'm not going to enter until I have
my technical break. Right? The technical
break for me is super super important
because if for example in this trade I
am hawkish, I am bullish but price comes
down and breaks structure to the
downside, then it signals that I've
missed something, right? Maybe I've read
something wrong or maybe the markets are
paying attention to something different,
right? So it's really important to have
that technical confirmation of what your
fundamentals are are thinking, right? So
for me, like I just said, fundamentals
bullish, right? I want to see USD USD
JPY push higher and break structure. As
you can see, we have this small zone
here and we push straight out of the
zone and break structure. At this point,
it's enough confirmation for me to enter
that trade. Right? So I'm entering and
I'm placing my stop loss below the low
and I'm targeting this high up here.
Okay. Now, as you can see, after uh you
know, not very long, we do get quite a
nice push in the direction that we want
to, right? You have to remember that
this through here is Asian session. So,
you know, we are going to get a bit of
ranging. There's not as much volume.
That's quite common for Asian session.
And then later in the day, we do get to
we get we push out of this range, right?
We break structure to the upside. Again,
confirming that we're still kind of
holding, I guess you could say, the
narrative from um from these comments
right here. My it's still holding. We
still get that bullish momentum. Let me
just put that over there. So, at this
point, as we break structure to the
upside, I'm moving my stop loss to break
even. Right, we're far enough away from
entry. We've got enough confirmation
that there is no kind of reason why I
should be taking a loss here. Um, if
anything, it'll be taking a break even.
Right. So, moving my stop loss to break
even. That's why I have this red line
here. I'm not sure if it's very visible.
Yep, here it is. And, um, yeah. So, we
get another I guess you could call this
like a retest. And then we get a strong
push in the direction that we wanted to
go in. Right. Everything's looking great
so far. Now, something interesting here.
So right here, this candle at 10:30 the
um the same day. This is unemployment
claims, right? This is a high impact
news release. And uh the reason that I,
you know, usually I don't hold through
high impact news because like I said, if
you don't, no one knows what the print's
going to be until it's actually
released, right? But the reason I am
holding through this is because if you
can remember these comments here, right?
Majority viewed inflation risk
outweighing employment risk, right? This
outweighing the employment, right? So,
if we're having unemployment claims, if
we get a bad print that's going to go
against me, I don't see that holding as
much, right? I don't see it pushing
completely down, right? This is my this
is my thought process, what I'm
thinking, right? For example, if we have
um if we have a good print, right? If we
have low employment claims, low can't
speak. If we have unemployment claims
come lower than expected, which is
great, we're going to push up in the
direction anyway. But if they come out
above expected, right, more people
filing for unemployment, that's not
going to be good. But I don't expect the
markets to hold as much on that because
of these comments. Right? Inflation risk
is outweighing the employment risk.
Right? So in my eyes, it's fair to hold
this trade um because I don't see the
reaction if the print does go against
me. I don't see the reaction being um
that that big of a deal. I don't see the
reaction the market's paying that much
uh putting that much emphasis on the
print. Right? And the forecast for this
print was 226 and the actual was 235.
Right? So it did come above expected
which is bad right more people filing
for unemployment. So the print actually
did come against me which obviously
ideally is not what I wanted but this
was going to be very interesting to see
how price would react right as you can
see right off the bat we do have quite a
strong um quite a strong bearish candle
but right after we start to push back up
right as you can see here this should be
it right here. Yeah. So at 10:30 we get
that massive uh push down but then right
away we start retracing. Right. This is
showing me that the markets are
respecting um what this was saying,
right? Majority are risking uh the the
inflation risk is you know it's pay
getting paid more attention to than the
unemployment claim. So this is actually
giving me um more kind of it's making me
more confident that the trade I'm
holding I should be holding. Right? For
example, if we had a if we had the
unemployment claim print and it just
completely melted from here and it broke
kind of this structure point here, then
I would definitely be thinking to, you
know, get out of the position because
it's going against me. that kind of
narrative I guess you could say is not
really holding as much. Okay, so I think
an hour and 15 after that, yes, an hour
and 15 after that we had manufacturing
PMI as well. So another high impact news
release and I'm just going to quickly
explain this over here. So PMI is
measured on a scale of 50, right? Above
50 means that the sector is expanding
and then below 50 means that this the um
sector is um getting smaller, right?
Shrinking, it's decreasing. So obviously
you know very simple kind of explanation
here but this is just how you um how
this is measured right and then
obviously if it's 50 it's just staying
the exact same there's no change. So I'm
going to quickly um put here so we had
manufacturing let's put this m and we
have services s and then let's put the
forecast and then for manufacturing we
had 49.7
and then for services we had 54.2.
Okay, so these are the forecast for um
for these prints, right? As you can see,
54.2 is obviously above 50. So that
sector is still is going to still
growing if we get as expected, right?
But for manufacturing, it's 49.7. If it
comes out at the forecast, we will be
decreasing. So I have to think about
what are all the possible scenarios um
that I'm I could be seeing and how am I
going to react to each of those
scenarios. Really quick, my mouth is
getting dry, but I need to get a drink
Okay, that's better. So, yeah. So, what
am I expecting to see if So, I first
have to think, right, what is the
absolute best scenario, right? The best
scenario is obviously both come above
50, well above the forecast, right? That
would be great. That would push price
straight in my direction. Another
possibility is that both the prints come
out below 50, right? Showing that
they're both decreasing. Now, this is
not what I want to see at all. And if
that happened, I probably would have
closed this trade if we broke below some
serious structure, right? Because it's
going it's going completely against what
I'm trading. Why I'm like, you know, my
whole narrative is completely going
against it, right? If two things are
clashing, the best idea is to get out of
the trade because what most hap what
most likely will happen is you'll get
stuck in some consolidation and it'll
just kind of, you know, range the whole
time, right? Which you don't want to be
in. So, what I wanted to see kind of uh
really uh heavily, obviously, the best
case scenario is, you know, like I said
before, both come out way above
expected, way above 50. That's great.
Okay. But something else that I really
wanted to see was I just wanted to see
both prints come out come above
I wanted to see both prints come above a
50. Okay. So for this services I didn't
actually need to see it come above
forecast. I just needed to be above 50.
But for the manufacturing I would need
it to be above the forecast. Right. So
um let's come to the actual print. The
release was actually a great release.
Right. For manufacturing PMI we had 53.3
well above 50 and above the forecast.
And then flash services PMI we had 55.4
four which is again well above the
forecast and well above 50 right so from
that print we have you know straight
away we have that bullish momentum right
I'm entering as we're breaking a minor
structure and then later in that trade
I'm entering again as we break some more
significant structure okay please keep
in mind that these two trades were much
smaller than my initial trade because um
yeah that's just how I manage my risk
you know risk management is super super
important if you're risking all over the
place well then you're destined for
failure right so yeah make sure your
risk is is in control I have my biggest
position here and then two smaller
positions up here. So, as I'm entering
these, uh, price pushes directly in my
direction. And actually, around this
time, I had to go to sleep because I
was, um, borderline crosseyed because
I'd been awake for so long. Okay,
so you can see that the trade did end up
running and hitting my takerit. Okay,
which is exactly what I wanted to see.
Of course, take profit. Perfect. Right.
So, I hope this was um informative. I'm
trying to make this as educational as
possible. You know, the reason I'm
making these videos is um is because uh
this is exactly what I wish I had when I
first started trading, right? There
isn't really that much out there about
kind of understanding the fundamentals
with your technicals. Um and yeah, this
just this is what I would would have
wanted to see. So, I hope it is
educational, informative. Hope you get
something out of this. Um just keep in
mind that, you know, if you're watching
this, there are many things that I'm not
going over, you know, and I'm sure
someone in the comments will uh say
something about you've forgotten this,
you've forgotten that. Look, I
understand. I know. I'm trying to keep
it manageable as I can for most people.
Um but yeah, this is just my thought
process throughout the trade. Obviously,
maybe you've seen this. This is another
trade that I took um based on the
Jackson Hole because now the um the
narrative has kind of changed with rates
and what Jerome Powell has been saying.
So um yeah, but that's that's for
another video. So yeah, I hope you found
this interesting. I hope you got
something out of this. If you have any
questions, drop a comment. Uh send me a
message. I have my details in the
description for all of those who have
messaged me. I am getting back to them.
Sorry, I've been really busy. But um
yeah, more videos to come. I'm going to
be posting much more consistently and I
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