What is News Trading And How to Read the Market Headlines
As you may already know, most Forex traders rely on technical analysis to trade the Forex market. In other words, traders study the historical price actions to predict the future price actions of a currency pair. These types of Forex traders use technical tools, such as charts, trends, and various types of indicators. However, fundamental trading, also known as Forex News trading, can be just as profitable, if not more. In fact many advanced Forex traders do nothing else but to trade the economic news. So how can you profit with Forex News trading? Forex news trading is a strategy that most Forex traders overlook. Let’s face it, there is so much hype about trading the latest greatest automated EA that Forex news trading just gets mostly overlooked. The truth is, News trading is a valuable tool to have in your arsenal. Even if you are already using an awesome signal service or the greatest automated robot, understanding the news can really make you more profitable or even help you avoid big losses. Knowing the fundamentals of a market is important but using it with a trading system or using it with automated Forex indicators is where its true value comes in. What is News Trading And How to Read the Market Headlines (Courtesy of CurrencyNewsTrading.com)
What is News Trading And How to Read the Market Headlines
First, of all, let me begin by explaining what are the economic news and how you can trade them. It is nothing more than the economic data relating to a country’s economy. These economic news are worth paying attention to because they can have a dramatic impact on the movement of individual currency pairs. Therefore, it presents opportunities to make profits if you know how to interpret these market headlines and its implications. This is a powerful skill in itself and it is the essence of Forex News Trading, but the more you monitor how the markets react to these market headlines, the more experience you will get and the better you will be able to predict the direction of the market. It is often said, that once you know the direction of the market, you already have a 50% probability that your trade will be profitable. It's important to note that some market headlines have a higher impact than others. For example, the US FOMC Rate decision will have a dramatic effect on the USD currency pair’s movement, whereas the US Trade Balance data will hardly move the USD pairs. What is News Trading And How to Read the Market Headlines (Courtesy of CurrencyNewsTrading.com)
What is News Trading And How to Read the Market Headlines
The high impact market headlines are definitely worth paying attention to, even if you are a purely technical trader. The high impact news can create wild swings and changes in market volatility, and can often render technical trading or most automated EAs completely useless during these times. The best thing to do is to trade the spike during these high impact news releases, or wait a few minutes for the market to settle before entering any trades. Often times, just minutes after the market spikes, you will have a chance to enter a trade at a better price. Let’s say that the US Non-Farm Payroll release is extremely positive, and then you may decide to immediately go long on the USD/JPY or go short on the EUR/USD. Alternatively, you could wait a few minutes for a retracement, before entering a trade on the direction of the spike. What is News Trading And How to Read the Market Headlines (Courtesy of CurrencyNewsTrading.com)
What is News Trading And How to Read the Market Headlines
Forex news trading is certainly not easy, and is not for everyone. The truth is, the best way to do it is by utilizing a combination of strategies. If you have signals on your side, you can check the news and even have a look at the trend in order to gauge the direction of the currency pairs. By double checking with several sources and correctly interpreting the market headlines, you can increase your accuracy in your Forex trading.
What is News Trading And How to Read the Market Headlines (Courtesy of CurrencyNewsTrading.com)