Is it possible to make money from the news?

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In Scotland’s first post-Brexit parliamentary election, the pro-Brexit parties won a majority. They now intend to call a referendum on independence – and to sue London over its legality.


GBPUSD

GBPUSD

The counting of votes cast in the May 6 election only ended in Scotland on Saturday evening – and it emerged that the two separatist parties, the ruling Scottish National Party (SNP) and the Greens, performed worse than the polls had promised them, but still together won a majority of 72 mandates 64 and 8 out of 129.
It was not without reason that we stressed that the election results were not known until Saturday, when the forex market was closed. Next, many traders started making apocalyptic predictions about what would happen to the pound sterling on Monday.
It was predicted that the British currency will fall to 1.35 on Monday and to 1.30 during the week. What actually happened? It was the exact opposite. Right from the market opening sterling began to rise steadily, not only against the US dollar, but also against other major world currencies.
On this move, individual traders were averaging out by selling the pound. Logic said that there was a mistake, soon the British currency would turn around and collapse. However, this did not happen, and the growth has only accelerated. As a result, many traders, who traded with big leverage, incurred huge losses.
So why didn’t the pound fall? That is a separate big question. In short, the British government decided to flood the issue with money. Huge investments have been promised to the Scottish regions, bypassing the government.
But that’s not what we’re talking about today. In today’s world, playing on the news is becoming an increasingly dangerous pastime. The irrationalism of markets means that the more confident we are about the news and the direction of the market, the more often the market disappoints us. The problem is that huge confidence leads to MM breaches and traders take much more leverage than they can afford.
And the cherry on the cake. Pay attention to the chart. We have not changed the trend lines on it for many months. And right now the price is approaching the lower boundary of the channel again, with lots of stops.

08.00 German consumer price index for April
08.00 UK Q1 GDP
14.30 US Consumer Price Index for April


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