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[Trading Reports, News & Event whipsaw]
Last week's whipsaw in most instruments in a short window is a good example of why one should avoid trading during reports, news & major events. It is tempting to enter a trade when there is so much price action in a short window.
But what most small traders fail to understand is that the institutional algos understand this crowd psychology and keenly set their 'greed & fear' trap to take home easy money. Retail traders fall into this trap over and over again until they blow up their accounts.
What is more worse is when small traders make some money trading reports by luck, the first few times. Then, they feel invincible and make it a habit out of it becoming more and more reckless. Over trading & revenge trading follows.
Build the habit of only trading the chart using appropriate risk management [1% rule], so that you are not as worried about the money on any single trade.
TRADE THE CHART, NOT THE MONEY is the best advice we got in our early days.