Forex News - Why are they important
We all know that trading forex involves taking calculated risk in every trade. That applies when trading under normal market conditions, trading during major events can prove quite lucrative as well as riskier. FX Traders, quite often, choose the trade during these periods as the market volatility significantly increases opening up trading opportunities. Following news and reports allows you to take advantage of the price movements and react instantly to ensure that you are either opening or closing the positions that will benefit your strategy the most.
Quite simply, news in FX trading drives the markets. Political and financial events impact the markets directly no matter where they occur. The data released in the form of news and reports require commitment on behalf of the trader, as they will need to invest both time and energy in understanding and evaluating the information provided. Your next question will definitely be:
What are the data a trader should be looking for in releases?
It is always important to know what news is being released or expected to be released in the week. Additionally, the type of data and knowing what to look out for is also very important. Some of the most important information released tend to focus on key facts and figures like inflation, interest rates, retail sales, economic growth, industrial production, manufacturing, etc.
Furthermore, it doesn't necessarily mean that if interest rates are the focus this month it will be the same in the consecutive month. Next month the focus might be in unemployment or inflation. Therefore, traders should really focus on whatever the market is focusing at that time.
Types of FX news and reports available
FX Brokers and specifically Finior capital offers various reports to assist you in tracking the news and make sure you are trading in the know.
Week ahead
The week ahead report is published in the beginning of every week and serves as an outlook for the week to come. It prepares FX traders for what's coming, what will be released and focuses on major currencies giving traders a heads up for the week ahead.
Market Analysis
These reports are released mid/end of every week and include a mix of :
Fundamental Analysis
Through Fundamental Analysis, traders are able to look at the FX Market and analyse how political, social as well as economic forces affect market prices. Quite simply, by looking at the events occurring from the aforementioned factors we are able to predict the future economic outlook and whether it's good, which should help the currency strengthen.
Technical Analysis
In Technical Analysis, FX traders study the price movement of currencies. The principle behind Technical analysis is that by looking at the history and the price movement of the currency or pair over a period of time and combining it with the trading conditions today, we can predict the future movement of the currency or pair.
Trade of the day
In Trade of the day, traders are focusing on a currency/pair that seems to be either volatile or we predict will show significant movement in the near future.
Make sure you make the educated trading decisions based on facts and figures. That is crucial to the success of any trader and any trading plan. Following the latest news and reports combined with the essential tools of daily forex trading enables traders to increase their chances for success.
