How to Trade Using News and Economic Forex Data Releases?
Most brokers have a free platform to let you know and understand the information that may influence the currency market.
Depending on Forex data news and results, the news will affect the markets for days or for only few hours.
Making Forex according to the analysis of news is vital. We need to identify areas in which to make entries and exits using analytical techniques of feeling. The market is mainly driven by economic and geopolitical news. The key Forex data and news releases are those which are issued by central banks, multinational firms, hedge funds and investment banks. Analyzing the latest news and developments in economic and geopolitical you can find in which way the market could move.
It is important to look at the economic calendar to see if the market is awaiting the release of an important announcement. The price may be affected before the release of the news or you can move very quickly, depending on the news. For example, if Forex data varies widely released than expected, the price will move up substantially.
It is advisable to open a position when the market settles down, shortly after a press release, and if you are really daring you can open a location just 10 minutes before the release of an important story, but in this case should make a stop loss to protect, given that the trend may move up to 100 pips in 30 seconds. To trade on the news, however, is not always clear and easy.
The main data are the Non-Farm Payrolls, the trade data, retail sales, the current account to GDP.
What benefits one may get from negative Forex data and news releases?
Often those who are new to Forex are asking, for instance, why the news is bad but the U.S. dollar has strengthened. Why does this happen sometimes? We're going to see in simple terms why sometimes the news does not reflect the trend of currencies, and vice versa. We talk about the concept of risk aversion.
Within all financial markets, the sentiment is the reason behind the whole movement. If you feel good and have confidence in the market, then buy. But if you feel sick and have no confidence in the market, then sell it.
Before the current crisis, for example, before 2008, the markets were doing well. Everyone was ready to take risks and invest around the world. All were in search of risk. When the market began to fall downward spiral since the middle of 2008, all stopped to look at own risk and exposure.
Some people thought the market was collapsing and that the money could be in danger, then best to move the funds and invest in safe assets.
What are some of the activities in the relatively safe world? Surely gold is a safe investment, as well as U.S. government treasury bills. All are traded in U.S. dollars and, therefore, that currency can have benefits, therefore, is strengthened.
This is still happening on a smaller scale, even with the negative evolution of the market.
In this way the concept should be clear that the negative news in the United States do not always have a negative influence on the dollar, so the USD strengthens. Trading at Forex is not a simple "game", rather it must use its own money in a properly managed and invest in the right way. Here, then, that you should always be careful and invest as you think best.
I'm a professional writer for 5 years. You can visit my website: Forex Trader.
Additionally, I have a blog, where you can read me my articles, such as Is Forex Trend Really Your Friend?.
Tag Words: forex