In the Forex market, there are only two ways of trading, the fundamental and the technical. The technical trading approach is characterized by watching and monitoring of Forex charts. This is done using moving average tools and indicators such as trendline analysis and fibonacci studies. On the other hand, the fundamental trading approach involves basing your odds on the market news. This is the basic principle of Forex news and events 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. It is also less risk as compared to the technical trading approach. To be profitable with Forex news trading, there are various news and events to watch. Let's see some of them.
1. News about US dollar
To be profitable with news and events trading, you must keenly follow every news and events that involves US dollars. The US dollar have greatest impact on the Forex trading and the market as a whole. Most traders even the technical ones are much aware of this fact. 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. Each month, there are hot announcements about US dollar.
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. The employment has direct impact on the US dollar and this shows its importance for trading news. 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. The announcement about international trade has great impact on news and events trading due to two major reasons. First, it has both the growth and economic influence on the overall strength of US dollar. This allows it to also to dictate the movement of other currency prices because of the US dollar influence. Secondly, international trade news is a strong measure of trade-centric economies e.g. for the Japan.
4. Trade balance
News about trade balance has significant effects on the movement of currency prices in the Forex market. This is because a country's trade balance also influences the strength of its currency and the economy in general. For example, if an economy is importing more than what their export to their trade partner, the good would be paid by the local currency which further weakens it. This leads to a weak currency pair position in the Forex market.
Conclusion
Trading Forex news, or the fundamental trading is very profitable but only if you understand how to use the global news and events that affects the Forex market. Apart from what are discussed above, there other events and news that also have great impact on the currency prices. In order to be a successful news trader, you need to keenly follow two kinds of news; news which are moving the market and those that are causing predictable reactions.
You already know the global news and events which affects the foreign exchange market and just what kind of news and events you should seek out. Go to swing trading system to learn some new methods to improve your revenue, also checkout Robo Forex review to find some facts about one of the most suitable ECN account for news trading.
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