Latest Forex News Helps In Making Profitable Trading Moves
In the currency market, economic data released by the economies of various countries
tends to be the most significant catalyst for movements of currency exchange rates in the market. Forex news trading involves taking advantage of these fluctuations in the market by trying to make the most of the market move as the news release comes out.
For a trader who follows fundamental analysis strategies keeping a track on new that affects forex is an absolute necessity as the moves in the currency rates reflect the fundamentals of their trading system. In the large amount of economic data released a trader needs to filter out the news that will affect the currency pairs he is interested in and the ones he is already trading. When the news comes out, a trader must pay close attention to the reported consensus figures but also to the revisions and whisper numbers (unofficial and unpublished rumours about figures).
Usually interest rate decisions, employment reports and GDP numbers are the most affecting factors to the currency rate. If you are to learn forex trading news you must maintain and continuously update an economic calendar that lets you know which releases are expected in what week so that you can keep a sharp eye on it .By and large, a minimum of seven types of data is released daily from the eight primary countries which have the most impact on the currency rates which usually include unemployment figures, retail sales reports, interest rate decision, inflation figures ,industrial production reports and trade balance and manufacturing surveys. There are also reviews on the on the business sentiments and market sentiments.
Depending on how a trader reacts when the market is highly volatile due to the releases, news trading can be classified as trading with fixed and variable spreads. The fixed spread is made looking to get out after a short interval while the variable trading will be done in the plan of keeping the trade for a longer while.
The key to learn forex trading with news is learning to figure out which data is important. Depending on other political or economic factors in a country the relative significance of these releases to your trading system may change .Once a trader manages to decide which reports matter to him he is required to patiently watch the market and the reaction of others to the release for a while as sometimes the trend may not be according to the expectations of the trader
Forex news trading can be lucrative, but it carries the risk of underestimating the data or when things dont go according to the expectations and market sentiment. Variety of options are available that enable traders to capture breakouts in volatility dodging the risk of reversal factors and thus making a lot of profits by staying on top of economic news.
by: Alvi Erine
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