There are only two ways of trading in the Forex market, technical and fundamental trading. The technical trading approach involves monitoring and watching Forex charts. Tools such as moving average and indicators such as fibonacci studies and trendline analysis are used to do this. On the other hand, the fundamental trading approach involves basing your odds on the market news. This is the overall principle of Forex news and event trading. By far, trading the Forex news and events is one of the most profitable strategies that would enable a trader to make large sums of money within a short time. As compared to technical trading, this approach is considered less risky. To be profitable with Forex news trading, there are various news and events to watch. Here are some of them.
1. US dollar news
To be profitable with news and events trading, you must keenly follow every news and events that involves US dollars. Forex trading and the market as a whole is greatly influenced by US dollar. This fact is well known by most traders including the technical traders. A number of participants in the market are keenly following the US dollar news to take any slight advantage and avoid being on the wrong side of the market which would make them less profitable. There are hot announcements involving US dollar which are released every month.
2. Employment reports
Employment report is released regularly every month on a Friday. This is a hot announcement to watch if you want to be successful with news and events trading. It is important for news trading because the employment has a direct impact on the US dollar currency. We have illustrated the impact that US dollar has in the Forex market. Any other item that affects the US dollar also affects the market in general. Massive moves in the currency prices are expected when large numbers miss employment. However, you need to be careful because the effect happens for a short duration.
3. International trade
The third important news and events to be privy of is the international trade announcements. There are two major reasons why the news about internal trade is very important. First, it influences both the economic strength and growth of US dollar. Due to this influence, it directly dictates the overall movement of other currency prices. Secondly, international trade is used as a strong measure of other trade-centric economies like the Japan.
4. Trade balance
In the Forex market, there are significant effects and impacts that news about trade balance causes to currency prices. This is because balance of trade directly influences the strength of the country’s currency and the economy at large. For example, an economy that is importing in excess of the amount of goods that they export to their trade partner would be forced to pay for the goods using their local currency making it weaker against the other currency. In the Forex market, this would lead to a weaker position for the particular currency pair.
Fundamental trading, or simply Forex news trading is only profitable if the trader understands the global news and events to watch and follow. There are many other news and events to watch apart from what has been discussed above. For a news trader to be successful, he must keenly watch two kinds of news; news which are moving the market and those that are causing predictable reactions.
Well right now you understand how essential it is to find out the global news and events, visit swing trading system to find out a few new approaches to improve your profit, also checkout RoboForex review to find some good info regarding one of the most trusted online forex brokers.