I have to say the same thing as Xela, do it if you backtest it first. Never trade something you didn't test. And if it is "regular news", not spikes, there would be no problem to enter in the market if you tested it first.
Thank you for your answers Xela. Yes, I have not given enough information and examples, I apologized but I appreciate your replies. I will study my method & news before making a decision on statistics & logical approaches (like how spread was mentioned).
You omit to mention the most important: 1) Identify trend and countertrends If 1) is clear in your plan, you will know if your support is weak or not, if sellers or buyers got the nuts, and when to buy or not, news or no news. You can't trade well if you don't master price action. CM
That is true, thank you. I have a clue on where I want to work on. Impact size/volatility of news vs Timeframe/Strength of Support levels.
I personally stay away from the immediate shock of news, the spike. But I do get involved X mins after schedule release for certain types of economic releases. As for unexpected news, I'll generally stand aside for a day or two.
One of the systems I built for automation only trades the news, the spreads are seldom narrow when news comes out, and you fooling yourself if you think you come out ahead in the long run of even a year of backtesting, one trade can wipe out 50 pips plus, so if you are up 25 pips, why gamble with a nice profit. It is different if you trade was long term system, but if you a day trader, I don't see why risking the profit at all. And if you back testing like 3,000 sample size? Way too many who back test have ample enough back testing, more stats you have the more you have confidence in what you are trading. Before I learned not to be in a positive position at news time, I would get creamed almost every time. Usually twenty minutes most markets settle down.