Why Keeping up to Date with Breaking News and News in general is an Essential Requirement for Trading Forex
As Forex traders it’s essential to keep abreast of all breaking news, and our detailed economic calendar provides the ideal method to ensure you’re aware of what’s upcoming. Through your trading platform you can also programalerts to deliver timely alarms, warning you of upcoming events; perhaps setting a five minute pre-warning that a calendar news event is about to be published. Not only will this exercise in discipline keep you focused, it should ensure that you’re regularly double checking your positions and potential orders, whilst offering up the opportunity to adjust your stops and micro manage your overall market exposure.
There is little disagreement amongst trading analysts that it’s: economic calendar (medium to high) impact events, political events, and perhaps outlier events which move the forex markets and indeed the wider equity indices. Our markets are not primarily moved by price reaching a certain point, or by a confluence, but by a combination and carefully constructed series of mathematical indicators finally aligning.
For sure price might, for example, ‘miraculously’ reach R1 and reject it before breaking through, however, that’s more in relation to where market orders are clustered, than any other pre-determined issue. Without a doubt if sudden price action develops, to push price up and then through R1 to perhaps R2, it’ll be an economic calendar event, or fast moving political event etc. that’s created the original movement, price isn’t suddenly magnetized to a level on a chart for any other reason.
Analyzing the news events and understanding the opportunities in the market
After a reasonable period of time trading the markets, whether as a professional, or part time investor/hobbyist, we will inevitably become extremely competent at analyzing news events, even if that analysis is what we’d term “rear view mirror”. We can clearly observe the impact a huge forecast miss can have on a currency pair, for example; if an interest rate rise is invoked, without prior forward guidance from the relevant central bank, then the chances are that the domestic currency relating to that central bank will suddenly see a spike upwards. This opportunity to become a curious and keen observer of economic news shouldn’t be overlooked, neither should it be wasted.
There’s a lot of information we can pay for over the internet in relation to trading; we can pay for technical indicator based strategies, that’ll work for a period of time and under certain conditions, but eventually they’ll fade and suffer drawdowns. It’s impossible for any over complicated indicator based strategy to work consistently, and if your timing is off; perhaps you (unluckily) begin to use the method at the wrong time, you could suffer a severe, irrecoverable drawdown. In contrast there’s a plethora of free information, in terms of constant economic news feeds, that can help deliver traders success and results. If you have spare time as a trader, whilst waiting for you set up or order to execute, then keeping abreast of breaking news is a worthwhile activity.
The blog of your favored Forex broker should be one of your bookmarked websites which you visit each day to pick up tips, read articles, peruse news items, etc. If your broker uses the STP/ECN model, they can only remain in business through your continual success; without successful clients their business suffers. In simple terms; they have a vested interest in helping you win. You win, you take money out of the market, due to them providing every possible assistance they can. Therefore, their written words will always be aimed at you and for you.
You should also make a regular visit to the heavyweight news providers and aggregators in the Forex industry, perhaps bookmarking the relevant Forex sections on Bloomberg and Reuters. Thereafter, why not bookmark the business news sections of your favorite newspapers?
Being highly tuned to all economic developments in your domestic country and the major economies such as: Japan, the USA and the Eurozone, will undoubtedly pay off in your trading and understanding of the why, how, what and where price moved. That understanding can then hopefully pay off, in terms of profitable trading.