What to Know Before You Trade

5 Best Forex News Sites

A driving force behind foreign currency trading is the natural law of supply and demand. This is Forex in a nutshell. This is also why knowing the latest Forex news is one of the indicators that give traders a clue when to enter and when to exit such market. News comes from a variety of rich sources. Being vastly informed in this case gives traders an edge. Based on the information given, traders can speculate what particular currency pairs will fare well thus giving traders the right formula to profit from such business endeavors.

Some experts vouch that when they do short-term trading they based the information that they have about 2 to 3 days results. Understanding the news is helpful when planning on long term goals. As a whole any news that has to do with the U.S. dollar is indeed information worth listening to. It cannot be denied that in most cases this is the preferred mode of foreign currency exchange in most countries. People buy goods from other countries using U.S. dollars because most commodities are sold in this denomination.  Another useful announcement to observe is the unemployment report in a country. If the unemployment rate is high this means the economy is not getting better.

However, trends do change. Anything that happens in one part of the globe has indirect or direct repercussions on other areas of the world. This is the reason for the popularity of the saying that “when the U.S. sneezes, the world catches a cold”.  Apart from the U.S. market such influential updates that traders listen to are those from the United Kingdom, Canada, Australia and Asia. There is no point in learning about these indicators if a trader does not know when to fight.

There’s no point in fighting a battle by learning techniques to fight the wrong opponent. The wrong opponent in this case refers to the wrong currency to bet on. It is for this reason that some form of personal discipline is important for traders. He has to have a clear head to make good decisions. He will profit if he has all of his skills intact. In some areas of life emotions is useful, but in this case trading should be made without trusting emotions. Gambling is a good example of the use of emotions to profit.

Know when it is conducive to trade. Never trade during bank holidays in the major players countries. Keep in mind that banks do actively participate in such market. During bank holidays the volume of transactions trickles down. Forex news is divided by color coding. Red stands for high impact when the market is active. It is true that these are high risks moments but it is also true that the more active players there are the more profits abound. This is why in most cases, traders do create their economic calendar and use this as a form of indicator. Not all erratic spiking movements are healthy. Traders are advised to keep out of trading when these are observed.

Read More:

Using Forex News to Your Advantage
Trading by Forex News Pros and Cons
Ways of Using Forex News for Profit
Important Things to Know About Forex News