Traders in the foreign currency market closely follow the latest updates especially with regards to Forex news. There is some news that can affect the prices of some currencies especially when those involve come from the countries that use these specific currencies to trade. Trading foreign currencies is a lucrative and financially rewarding career because the market is always open 24 hours a day. There are at least eight currencies that are available for trading. These come in two pairs of different currencies. It is never advisable to trade the same currency twice in a given trading session.
The eight major foreign currencies mentioned here are: U.S. dollar, Euro, Australian dollar, New Zealand dollar, Canadian dollar, British pound, Japanese yen and Swiss franc. As a general rule every trade must include the U.S. dollar since it is being used to trade in any part of the world. It is safe to say that the U.S. dollar has a great impact on the foreign currency market. Depending on the Forex news, there are some days when it is conducive to trade with it and hopefully matched it with another currency. This is when it is a must to observe the latest data on how the market uses such specific currency.
It is not just the news that determines how trading will fair with any given currency pair. It is for this reason that the saying “News moves the markets” is true. There is no telling as to how much impact such updates can result from the change from small to large market reaction. This is why traders do take notice of trends and the actual effects. With the release of such fresh information, such as how a country’s economy is performing, there is no telling how long the recession will affect the market. The results might range from a few minutes, a few hours or several days.
Not all news produces the same reaction. The key is to know which information matters and which do not. For example the latest report about an increase in jobs. This directly affects the increase and decrease of prices in the market. With regards to the reports coming from other countries, it will take a lot of experience for a trader to know what type of news will directly impact the market.
Some Forex news website provides a simplified form of a global financial calendar. It helpfully contains the news events that are categorized as low, medium and high impact. Traders can find such information useful. Generally speaking, the biggest impact coming from the latest information come from the Central Bank’s rates, employment reports and retail sales. The information gleaned from such is only half of the big puzzle. Together with this information traders must use a combination of methods in order to come up with the most effective game plan that they can think of. If this will work they must learn to stick with it even if they suffer from minor losses. If they believe that the market will eventually overturn in their favor than they should patiently wait until it happens.
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