News continuation trades: how do you ride the second wave?

The first move after a release is often noise; the second wave, once the market digests the data, is the trade. Continuation strategies wait for the digestion and enter with the new consensus.

News continuation trades: how do you ride the second wave? — risk-reward diagram
A risk-reward ratio of 1 to 2

What's your method?

  • how you wait out the first spike
  • the structure that signals the second wave
  • the release where the second wave never came
News continuation trades: how do you ride the second wave? — candlestick anatomy diagram
The parts of a candlestick: wick, body, open and close

The CPI guide explains the digestion process on inflation days.

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