Trading Forex News
If you have been trading Forex for some time, you know the value of using Fundamental analysis to decide when and how to trade. News from around the world affects local currencies and this has a direct effect on Forex price movements.
That is why following the news is so important to a Forex trader. If, for example, Japan announces its GDP, this will immediately affect the Yen and its ratio to other currencies around the world.
It is not only the economic news that plays a role in Forex prices. Social and political events can cause a local currency to move around and the reaction in other areas of the world is automatic and immediate.
Read the News
Keeping abreast of what is happening in other countries is an essential tool for every Forex trader. In addition, watching the economic calendars for expected announcements can you to is ahead and gives you a heads up on what to expect. You don’t want to being taken off guard as this is a sure way to lose your money.
Our first instinct when we hear a report that might be relevant to our trades is to jump right in and place a trade. This is usually a knee jerk reaction and will only lead to our making the wrong move. The market has already responded to the news and the prices have by now moved up or down.
In addition to staying alert to what is happening around the world, it is important for you as a Forex trader, to keep in mind that by the time any news is announced, it is often too late to react. News may travel quickly but not quickly enough sometimes.
It is worth staying one step ahead of the game by trying to be constantly in the loop about what is happening with the currency you are trading. To do this and to be able to buy and sell at the right time and right price you need to have a planned strategy in mind. Novice Forex traders should learn strategies from experienced traders, you can find them on forex brokers review, or from online tutorials or courses such as FXAcademy that teach tools and trading strategies.
Knowledge is money so the more you know, the more successful you will be.