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How To Trade Forex On News Releases

Discussion in 'Fundamental Analysis' started by amittimothy, May 24, 2016.

  1. amittimothy

    amittimothy Well-Known Member Trader

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    One of the great advantages of trading currencies is that the forex market is open 24 hours a day (from 5pm EST on Sunday until 4pm EST Friday). Economic data tends to be one of the most important catalysts for short-term movements in any market, but this is particularly true in the currency market, which responds not only to U.S. economic news, but also to news from around the world. With at least eight major currencies available for trading at most currency brokers and more than 17 derivatives of them, there is always some piece of economic data slated for release that traders can use to inform the positions they take. Generally, no less than seven pieces of data are released daily from the eight major currencies or countries that are most closely followed. So for those who choose to trade news, there are plenty of opportunities. Here we look at which economic news releases are released when, which are most relevant to forex (FX) traders, and how traders can act on this market-moving data.
    What Are the Key Releases?
    When trading news, you first have to know which releases are actually expected that week. Second, it is key for you to know which data is important. Generally speaking, these are the most important economic releases for any country:

    1. Interest rate decision
    2. Retail sales
    3. Inflation (consumer price or producer price)
    4. Unemployment
    5. Industrial production
    6. Business sentiment surveys
    7. Consumer confidence surveys
    8. Trade balance
    9. Manufacturing sector surveys

    So, Its we need to be ready to adapt ourselves Depending on the current state of the economy, the relative importance of these releases may change. For example, unemployment may be more important this month than trade or interest rate decisions. Therefore, it is important to keep on top of what the market is focusing on at the moment.
     
  2. amittimothy

    amittimothy Well-Known Member Trader

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    News trading often brings the biggest moves of the month. Because of this, it’s no wonder that trader’s seek out high importance news events to try and catch a big move. However, if you don’t have a solid plan for trading the upcoming event, you’re likely better off not trading at all. Here is a plan to make sure you’re ready when a big move comes your way.

    “Don’t think about what the market’s going to do; you have absolutely no control over that. Think about what you’re going to do if it gets there. In particular, you should spend no time at all thinking about those rosy scenarios in which the market goes your way, since in those situations, there’s nothing more for you to do. Focus instead on those things you want least to happen and on what your response will be.” – William Eckhardt

    Have you ever wondered why markets move so much before a news release? Quite simply, it’s because of massive amount of traders are entering or exiting based on the news release and these traders want to do so at the price they feel is best. This causes a relatively large move immediately following a news release.

    Now, trading the news is exciting. However, it’s also risky due to the large moves that follow a news release and because of these moves you need to be well prepared ahead of time if you’re interested in trading around big news events. First, it’s important to cover how to know when a big news event is coming out.

    hope this article helps ..
     
  3. amittimothy

    amittimothy Well-Known Member Trader

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    Friends keep in mind Trading New releases could be dangerous to you if you are not well aware of the fact that during the news hours Spreads are widen between 15-20 on the major news announcements and if you were not able to get into the trade earlier then chances are your trades are executed at the end of the Spike when the it time of Re tracememnent and your positions may go all the way negative. So kindly be carefully when you trade news.
     
  4. amittimothy

    amittimothy Well-Known Member Trader

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    Trading the news is really dangerous if you don't have good reliable broker that gives you offers Genuine ECN to its Client. I will recommend to use Forex Mart ECN . which means “Electronic Communication Network” is a process which grants direct access between market participants particularly the small traders (banks, investment funds, and individuals) and the top liquidity providers. By creating this direct link, clients are able to have an efficient and effective trading process which mitigates risk and maximizes profit opportunities. And because ECN technology eliminates the intermediary and dealers, clients have faster and cheaper trades.
     
  5. amittimothy

    amittimothy Well-Known Member Trader

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    Deposit Insurance
    We want nothing but the best for all our clients – and that includes prioritizing your funds and interests.
    ForexMart is a member of the Investor Compensation Fund, a fund conceived by the Section 17 of the Investment Services and Activities and Regulated Markets Law of 2007, which states every Cypriot investment firm must be part of the Fund. Its main objective is to secure claims of the covered clients in the event the company in question fails to perform its obligations, specifically:
    Return the funds owed or belong to the covered client
    Turn over the financial instruments to the customer entrusted to the member firm.
    The fund will pay the compensation for the affected client, subject to the existing legal and contractual terms. However, individuals with ongoing criminal proceedings are prohibited from making claims, as per Prevention and Suspension of the Legislation of Proceeds from Criminal Activities Law of 2007.
    Compensation payable to the covered client will depend on the prevailing rules and company's books. It is computed by adding all the total established claims of the client against the firm, stemming from all the services rendered by the entity. As of present, the amount paid to the covered clients is €20,000.
     
  6. amittimothy

    amittimothy Well-Known Member Trader

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    GBP/USD attempts a recovery to 1.37, might get sold into
    After a free-fall all the way to its lowest level since 1985, the GBP/USD pair seems to have found some support around 1.3200 region and recovered nearly 500-pips from session low to 1.3750 before fresh selling pressure emerged that took the pair back to below 1.3700 level.

    In a historic referendum on its membership with the European Union, UK citizens voted to leave the EU that resurfaced uncertainty surrounding its implication on the UK economy, taking the British Pound spiraling lower.

    The GBP/USD pair, however, managed to recover from lower levels after the BoE conveyed to take all necessary steps to ensure monetary and financial stability.
     
  7. amittimothy

    amittimothy Well-Known Member Trader

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    AUD/USD Fundamental Forecast – July 4, 2016


    The AUD/USD moved up 8 points to 0.7459 remaining just where the RBA wanted the currency to trade. A more positive mood hit the markets after stronger data printed in the morning session. Chinese Caixin manufacturing PMI missed forecast which sparked a rally on hopes of more stimulus from the PBOC. Chinese manufacturers reported the sharpest deterioration in operating conditions in four months in June amid economic weakness at home and abroad, with the Caixin China Purchasing Managers' Index coming in at 48.6.

    The reading is lower than May's 49.2, partly because output fell at the quickest pace since February. Figures above 50 indicate expansion, while those below signifies economic contraction. The June figure was the lowest since January, when the PMI dipped to 48.4, and marks the 16th consecutive month of contraction.

    Total new orders decreased in June for the second month in a row for manufacturers, driven by the seventh straight monthly decline in new export sales.

    Companies also continued to pare back staffing for the 32nd successive month at a rate similar to that in the previous four month.

    Fewer new orders contributed to a reduced amount of purchasing activity across the manufacturing sector. Meanwhile, companies maintained tighter inventories, with stocks of both pre-production and finished goods falling, albeit at slower rates than in the previous month.

    The Australian dollar is sharply higher as investors sell off US dollars to balance their books at the end of the quarter.

    BK Asset Management managing director of FX strategy Kathy Lien says the move has been triggered by investors adjusting their portfolios at the end of the June quarter.

    “Managers of index funds and other similar equity market portfolios need to sell dollars and buy euros or pounds to bring their overall exposure back into balance,” she said.
     

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