b) Having a non-directional bias<\/em><\/strong><\/p>\n\n\n\n Having a directional bias means that you expect the market to move in a certain direction once the news report is released.<\/p>\n\n\n\n When looking for a trade opportunity in a certain direction, it is good to know what it is about news reports that will cause the market to move.<\/p>\n\n\n\n Several days or even weeks before a news report comes out, there are analysts that will come up with some kind of forecast on what numbers will be released.<\/p>\n\n\n\n As we talked about in a previous lesson, this number will be different among various analysts, but in general, there will be a common number that a majority of them agree on.<\/p>\n\n\n\n This number is called a consensus<\/strong>.<\/p>\n\n\n\n When a news report is released, the number that is given is called the actual<\/strong> number.<\/p>\n\n\n\n This is a common phrase used in the forex market because often times it seems that when a news report is released, the movement doesn\u2019t match what the report would lead you to believe.<\/p>\n\n\n\n For example, let\u2019s say that the U.S. unemployment rate is expected to increase. Imagine that last month the unemployment rate was at 8.8% and the consensus for this upcoming report is 9.0%.<\/p>\n\n\n\n With a consensus at 9.0%, it means that all the big market players are anticipating a weaker U.S. economy, and as a result, a weaker dollar.<\/p>\n\n\n\n So with this anticipation, big market players aren\u2019t going to wait until the report is actually released to start acting on taking a position.<\/p>\n\n\n\n They will go ahead and start selling off their dollars for other currencies before the actual number is released.<\/p>\n\n\n\n Now let\u2019s say that the actual unemployment rate is released and as expected, it reports 9.0%.<\/p>\n\n\n\n As a retail trader, you see this and think \u201cOkay, this is bad news for the U.S. It\u2019s time to short the dollar!\u201d<\/p>\n\n\n\n However, when you go to your trading platform to start selling the dollar, you see that the markets aren\u2019t exactly moving in the direction you thought they would.<\/p>\n\n\n\n It\u2019s actually moving up! What the heck! Whyyyyyy??<\/p>\n\n\n\n This is because the big players have already adjusted their positions way before the news report even came out and may now be taking profits after the run-up to the news event.<\/p>\n\n\n\n Now let\u2019s revisit this example, but this time, imagine that the actual report released an unemployment rate of 8.0%.<\/p>\n\n\n\n The market players thought the unemployment rate would rise to 9.0% because of the consensus, but instead, the report showed that the rate actually decreased, showing strength for the dollar.<\/p>\n\n\n\n What you would see on your charts would be a huge dollar rally across the board because the big market players didn\u2019t expect this to happen.<\/p>\n\n\n\n Now that the report is released and it says something totally different from what they had anticipated, they are all trying to adjust their positions as fast as possible.<\/p>\n\n\n\n This would also happen if the actual report released an unemployment rate of 10.0%.<\/p>\n\n\n\n The only difference would be that instead of the dollar rallying, it would drop like a rock!<\/p>\n\n\n\n Since the market consensus was 9.0% but the actual report showed a bigger 10.0% unemployment rate, the big players would sell off more of their dollars because the U.S. looks a lot weaker now than when the forecasts were first released.<\/p>\n\n\n\n It\u2019s important to keep track of the market consensus and the actual numbers<\/strong>, you can better gauge which news reports will actually cause the market to move and in what direction.<\/p>\n\n\n\n A more common news trading strategy is the non-directional bias<\/strong> approach.<\/p>\n\n\n\n This method disregards a directional bias and simply plays on the fact that a big news report will create a big move.<\/p>\n\n\n\n It doesn\u2019t matter which way the forex market moves. We just want to be there when it does!<\/p>\n\n\n\n What this means is that once the market moves in either direction, you have a plan in place to enter that trade.<\/p>\n\n\n\n You don\u2019t have any bias as to whether the price will go up or down, hence the name non-directional bias<\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":" There\u2019s no single strategy for trading the news. When the news hits, the price tends to spike in one direction or has a muted reaction to the data as traders digest the outcome against market expectations. Knowing this, there are two main approaches to trade the news: a) Having a directional bias b) Having a non-directional bias […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[818],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9824"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=9824"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9824\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=9824"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=9824"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=9824"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Directional Bias<\/h2>\n\n\n\n
![\"Bullish](\"https:\/\/bpcdn.co\/images\/2010\/10\/bullish-analyst.jpeg\")
<\/figure>\n\n\n\nConsensus vs. Actual Number<\/h3>\n\n\n\n
\u201cBuy the rumor, sell on the news.\u201d<\/h3>\n\n\n\n
Non-Directional Bias<\/h2>\n\n\n\n