Is it possible to make money from the news?

By 12/05/2021News

Gold  1830,145

EURUSD   1,2128

DJIA  34035

OIL.WTI  65,395

DAX   15123,50

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.



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

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.