The Importance Of Staying Up-To-Date With Forex News
Many new forex traders feel that staying on top of forex news is unimportant. They believe that the trade is all that matters, and developing a strong trading strategy is the most significant aspect of trading. These traders believe by basing a strategy on technical analysis, independent of fundamental analysis, one can easily have a profitable career. While this may be true, there are many reasons one should know what is happening in the news.
Trading on technical analysis alone
Every trader has a different trading style based on a unique trading strategy. Many short-term traders employ technical analysis exclusively when developing this strategy as they feel fundamentals are irrelevant if one is already incorporating analysis of the market trends. However, by looking at trends alone you will see what the market is doing, but not the global reasons behind this movement.
The reasons for looking at forex news
Although technical analysis is the stronger, more reliable technique used to develop a trading strategy, there are several reasons why one should incorporate forex news. One of the primary reasons is because forex news affects the market on a global scale and can cause sudden pattern changes. These changes usually occur when breaking news is reported about specific countries.
One also has to consider news because the market changes around news developments. The trader may not have the ability to technically predict the market movement, but if one maintains an eye on the news there is a greater chance you will be on the right path. Of course, you will only have the option to trade after the trend is established.
Finding forex news
When a new trader enters the forex market, they will find it very confusing. There are different skills they need to learn, contacts they need to make, and personality traits they need to manage. One aspect which needs to addressed is identifying different forex news resources. There are two different tools which make this very simple.
The first tool is a forex calendar. It details all the news you may need to know and divides the news into high, medium and low impact categories. These categories have been created to inform the trader how urgent the news is and how greatly the news is affecting the foreign currency exchange market. By organising the forex news accordingly, the trader is able to filter through the reports and see the events relevant to the currency pairing he is trading.
The second tool is a live news feed. This live news feed or live streaming is a real time feed keeping you up-to-date with immediate forex news as it is released. Evidence has indicated that breaking news has instantaneous affects on the forex market and can cause severe market swings. This happens when large players move their money from one trade to another, and with a live news feed you will have the ability to see this happening. Many trading platforms are fixed with this news feed, but one will have to confirm that the platform you are using has this service. If it does not there are several free and paid for services one can utilise.