Have you ever tried trading a key economic news just to make some quick money through market impulse?

Now, I am really good at it!

As soon as Yellen started to speak, it shot all the way up and I shorted it right at its peak.

It then came all the way down to 100, a very crucial psychological level, and thus exited the trade once I determined that the price is not able to break any lower.

Sounds cool huh? Well..let me also share with you the truth. I made the biggest loss all because I traded such key economic news!!

In one of the most recent and most eventful news, I lost a few hundreds of pips in just a matter of minutes.

Here’re my Top 3 Reasons why you should NEVER trade the news:

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1) Fast Money – Let’s be honest, the main reason why people are so tempted to trade the news is because there is a potential to capture from a mere 20 pips to 100 over of pips in just a few seconds to a few minutes. It is basically fast money, just like going to a casino trying to bet and hopefully to earn some quick cash.

The mentality is nothing different as compared to a gambler. And with such mentality, the fatality comes when you made just one mistake that causes you to lose a significant amount of pips especially large amount over 100 pips. When that happens, all you will be thinking of is to win back your losses – exactly what every gambler in the casino is doing and you know what’s the end result.

2) High Emotion Exposure – Even the best or the most experienced trader in the world will have his heartbeat jumps a little faster when the market suddenly surges 100 pips in one direction and even worse when it plunged after it surged, causing a whipsaw in the market which usually will kill most of the traders instantly.

The biggest reason why people failed in trading is the inability to control their emotion and made sound and sensible trading decision. You may be able to do so for one or two times or any time perhaps when you are feeling normal, but it just take one extremely bad day when where everything seems to go wrong in your life to screw you up entirely and that’s when market impulse caused by economic news will take your money away.

3) Unpredictable Market Movement – I was really proud of myself for having the ability to predict when the central bank will cut or raise its interest rate, RBA especially. Until one day when the bank cuts rate and the currency strengthen instead of weakening, I realise that even if you can predict their actions, you can never predict how the market will react.

Just remember this…the market does not care about what you feel, what you’ve learnt and what you think you already know.