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Trade on Forex News

Trade on Forex News

Economic announcements and data are important catalysts for short-term trends in any financial market, but it is particularly useful in the case of foreign currency exchange.  The forex market responds to any economic news from around the world.  With the eight major currencies and derivatives thereof, there is always some potential economic forex news that traders should be using to their advantage.  There are generally no less than about seven data announcements released on a daily basis relating to the major countries that are traded.  If you have chosen to trade on forex news, the number of opportunities available is plentiful.

Trading forex news can be more difficult than it sounds.  It is not only the reported data that bears importance: the revisions and whispered data are equally important.  Some releases, based on the significance of the country they affect and their importance, will have more impact on the market than others.

When are Releases Available?

The times of the economic news releases vary depending on the country of release.  It is recommended that you rely on a forex calendar to keep up-to-date with the times and dates of relevant releases.

The Most Important Releases

If you intend trading news, you must know which releases to expect in any particular week.  It is also important that you know which data to expect.  The most important economic data releases for any country include:

  • Interest rate decisions
  • Inflation reports, either producer or consumer price
  • Industrial production
  • Consumer confidence surveys
  • Manufacturing surveys
  • Retail sales figures
  • Unemployment figures
  • Business sentiment surveys
  • Trade balance

The importance level of these releases will depend on the state of the economy of the country.  This indicates that you should be aware of what the market focus is at any given time.

How Long Does it Last?

The markets often react to news releases hours or, at times, days after it has been released.  The effect, however, is generally felt for a day or two after the announcement, but the impact of the announcement could last for up to about four days.

Trading Forex News

A common method of trading news is to find the period of consolidation before a big number, and trade based on that number.  This is possible on a short-term and a day basis.  Trading news is especially difficult due to the volatility of the forex market during these times.

To trade forex news effectively, you should keep abreast of all relevant news releases.  It can be a complicated strategy to use if you are not alert and cannot act quickly.  The currency market is very prone to short-term up and downswings that may be affected by news releases related to the market.  To trade effectively, you must know which releases to expect and which the most important ones are with respect to the country’s current economic conditions.  Most of all, you need to understand the method of trading that can effectively use this data that moves the market so swiftly.  There are several options available to you if you want to ride the crest of the wave during volatile periods without having to face severe risks.  All you have to do is stay on top of the relevant economic news, and you should be able to see rewards.


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