Hints for Trading Forex with the help of News
Why is it important to keep a track of the economic developments
of a country whose currency you are planning to buy?
Every currency represents a country in the Forex market. And
therefore, the economic status of each country or nation is valued
into its exchange. But with so many currencies in the market to
trade for, it can get a little challenging to keep a track of
every countries economic growth and development.
This is the reason why Economic Indicators are used by the traders
to assess the strength of an economy they are interested in. A
trader should always remain vigilant and informed about when these
indicators are due for release in the market. It is also equally
important to be updated on all the news releases which are to be
released and can make an impact on the market.
What makes some economic indicators more important than the
Every economic indicator has the power to influence the Forex
market, itís just the degree of influence that ranges from low to
medium to high. Which ever indicator is carrying the news
capturing most of market's attention gets more significance than
the other ones.
News carrying high GDP data of a certain country or information
about high employment rate in another is bound to make greater
news than others, as these factors are directly effecting, rather
boosting the economy of those countries.
Does difference between the consensus and actual results cause
It is not correct to just keep yourself updated as a trader with
the latest of economic, political and geographical news. What is
even more important is to know what effect has the current news
caused in the market and why?
One of the ways to find this out is by also keeping a tab of the
expectations of the fellow traders in the market, from the
different economic indicators and the news they were supposed to
carry according to the.
A study of whether or not a news flash is matching the market
expectations is a highly significant aspect, as each market
forecaster is expecting different news from each indicator, news
in their favour.
Therefore, apart from knowing the current news update, what needs
to be kept in mind is the consensus number which is met
successfully. A huge variation between the consensus and actual
results can be a valid source for price movement.
Should technical investors also focus on news releases?
Keeping in mind a case of any monetary market, whenever a market
is being dominated by the fundamental factors such as economic
data, Technical analysis are generally not in use. This is because
of the reason that most of market traders become sensitive to
these economic and political developments.
Also, with so many speculations arising in the market, more and
more importance is given to such developments as well as the
essential news releases like increase in a certain countryís
export figures, which have the power to spike up volume as well as
volatility in the market.