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Friday, April 19, 2024

Trading off News Reaction Highs and Lows – 2 – YourTradingCoach.com

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Keep it simple, traders.

A month ago we discussed trading off news reaction highs and lows. You can find that article here if you missed it – https://yourtradingcoach.com/trading-process-and-strategy/trading-off-news-reaction-highs-and-lows/

This was the structure at the time… 

<image: Trading off News Reaction Highs and Lows> 

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<image: Trading off News Reaction Highs and Lows>

So I’m hoping that you took the lesson from that article and studied a few more examples from your own charts. And then added this into your own plan.

These are obvious news-derived S/R levels from which we can trade our YTC PAT BOF, TST or BPB setups.

And while the market will never repeat the exact same price sequence, the general concepts do repeat. Over and over again.

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Tuesday provided a new example.

CPI figures were released an hour before the RTH open. This was a potentially market-moving event.

<image: Trading off News Reaction Highs and Lows>

The reaction though was a spike lower and higher, then settling back within this range.

<image: Trading off News Reaction Highs and Lows>

<image: Trading off News Reaction Highs and Lows>

Two levels that define a clear boundary between bullish, neutral and bearish zones.

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And two levels to potentially trade off.

Essentially these work like S/R levels, even though they’re not formed by our usual higher timeframe process.

And so let’s trade…

<image: Trading off News Reaction Highs and Lows>

<image: Trading off News Reaction Highs and Lows>

<image: Trading off News Reaction Highs and Lows>

<image: Trading off News Reaction Highs and Lows>

News reactions which cause emotion – in particular trapping out participants in one or more directions – can create levels worth watching.

Study your market for similar occurrences. And if you find value in the idea, add it to your playbook for future high impact news events.

Happy trading,

Lance Beggs

PS. See here for BOF and BPB trade setups, as displayed in this article.

 


 



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