Forex news trading is the mirror how the market will respond
to the announcement of major news stories or we can say it’s the release of
market data. Whenever major news is released, the market will invariably
respond. Many people have a question in their mind is whether the market will
rise or decline based on the news. Many traders trade based on their experience
on how the market will respond. There is only one question that can be asked
about news trading that does the Forex
news trading really work during trading?
Most markets will have slight movement preceding the
announcement of major news events that are regularly scheduled. These events
might be the release of market indicators or unemployment numbers. This is
because there will be rumors about what the actual numbers to be released will
be like. Traders will then place a position based on how they feel the market
will respond if these rumors are true.
As we know the Forex market place is open for trading 24
hours a day. Any news announcement in any country during the day or night will
immediately have a reaction on the currency market. Usually, the market will be
slightly changed just before the news announcement and then the market would be
a greater change after the news announcement.
With Forex news a trader is basically trying to speculate on
the impact of the news announcement. There is no question that major news
announcements can have a profound impact on the Forex market place. This is why;
most Forex traders will try to capitalize on the release of major news
The main point of news trading is that most investors
already follow this strategy. Till there is a large number of traders investing
based off the news, the market is quick in responding to the change from the
announcements. These quick changes in the market limit the ability for traders
to profit from the news announcements. For this reason many people do not think
Forex news trading is a wrong strategy.
Forex news trading does not need any types of technical
analysis of the market like other trading strategies. Since, most news
announcement happen very rarely there is no technical analysis model that will
be able to account for the introduction of the news. This allows a trader to
use objective reasoning in order to determine how to place their trades
immediately before and immediately after the announcement of major news.
Most news announcements have a short term impact on the
Forex market place. Very few news announcements will have a long term impact on
the market. With the new announcement having such a short term impact, traders
will look to quickly move in and out of positions. The impact of the news may
be felt for only a day or sometimes less. You do not want to have a long term
position if you trading based on news.
The excellent strategy to follow when Forex news trading is to place two orders on both ends of the current
market price. If the market moves up then you can keep the order that profits
from the move and cancel the other order that is below the current market
price. This allows you to profit regardless of whether the market rises or
Every investor should visit Forex news to know the updated
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Does Forex News Really Work During Trading?