Forex News Trading

Forex news trading is a strategy used in online forex trading that when executed properly can lead to phenomenal profits without the need to look at all sorts of charts and technical indicators. For some investors, forex news trading is the only strategy they use, due to the abundance of economic news released as well as the easy access to information that can be found online.

Most of us know that online forex brokers like to feed us with endless news daily, to entice us to trade as often as possible. However, while the majority of these news have little impact on currency prices, the

more important ones can cause currency prices to move up or down by as much as 100 pips minutes after they are released. In order to participate in forex news trading, you need to take a look at the economic calendar and decide which of the news will have impact on currency prices. The idea is to do your research and put in your trade about 15 mins before the news is released. If your analysis is accurate, the currency will move in the direction you anticipated once the news is out and you can cash out within minutes or even seconds.

For forex newbies, I would recommend that you concentrate on news involving the USD for now. Since this is the most heavily traded currency, news of the US dollar will invariably have the greatest impact on the market.

The news to look out for includes the non-farm payroll report, retail sales, CPI and PPI (Consumer Price Index and Producer Price Index), Gross Domestic Product and Interest Rate adjustments. It is important to note that you’ll be looking at your own analysis of the situation not independently but in relation of market expectations. The reason is because industry analysts would have already released their forecasts and currency prices would have already taken this into account. Your own analysis would be if the market expectations are too optimistic or pessimistic.

The news with the highest impact is the US (Federal Open Market Committee) FOMC meetings, where decisions are made to either cut, raise or keep interest rates intact. The FOMC is scheduled to meet 8 times a year (always on a Tuesday) and may have additional meetings if required. In the lead up to FOMC meetings, trading is extremely volatile as many traders anticipate the decision on interest rates.

Another highly anticipated economic news release for those participating in forex news trading is the US Non-Farm Payroll, which is released every first Friday of the month at 8.30am EST. This is a “state of the economy” report and used by economists to forecast future economic activity.

If you enjoy reading reports and market projections over charts and technical indicators, then forex news trading might be the strategy for you. With the abundance of economic news, there are more than ample trading opportunities for the forex news trader.

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