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The "news" trade
The essential point for successful work at Forex market is the accounting of economic events and news. This is very important and for the novice player and for the experienced speculator. Determining their current strategy, the trader just have to take into account is planned for the next trading session events in the "Economic calendar".
You have to remember the exact time of the emergence of economic statistics that can affect the fate or already open by You or prospective transactions. You need a clear understanding of what options of response of the market to change (or, conversely, to preserve the integrity) of a "fundamental" factor. In any case do not forget about the "parallel" use of technical analysis tools.
It is necessary to separate those events that are actually capable of "moving" markets, from those whose influence is very small. Try to highlight the most significant of them, who found their "importance" in everyday trade practices. The result was a small list, which You'll be able to complement themselves:
• Central Bank meetings, where you can change their key interest rates, as well as other "strategic decisions, which are published in the minutes of such meetings;
• Unemployment rates, as the main reflection of the "health" of the economy. Particularly strong influence on the market, such performance of the United States;
• Inflation is usually measured by retail price indices in the country;
• GDP (gross domestic product) and industrial production and in the service sector, which represented many of the "indexes";
• Statements by the various rating agencies about changes, or possible changes in credit rating of main countries-participants of the Forex market;
• Indirectly, the same role play and "debt" auctions conducted by individual governments;
• Presentations by the key officials from Central banks, particularly striking are the "plumes" after the speeches of the Chairman of the Federal Reserve and European Central Bank President. Sometimes a very strong influence and the speeches of the heads of state and Finance Ministers, when they affect financial policy. This category also include the results of the summits of world leaders;
• Various indexes of business activity in Europe by their supplier, for example, German ZEW, U.S. ISM (Institute for Supply Management) and the University of Michigan, Japan's TANKAN indices from the Bank of Japan, etc.;
• Similar in action and the indices of consumer confidence, which are based on surveys of ordinary citizens in a particular region;
• This category may include indicators of the real estate market that perfectly reflect "the citizens' confidence in the future."
Unplanned events happen infrequently on the Forex, because the lion's share of economic statistics has a strictly regular character and the market is "always ready!" to such news. As a rule, any economic indicator in advance to discuss analysts in expressing their forecasts and estimates.
And if the news were in "agreement" with the predictions, then most likely she will not have a significant impact on the dynamics of the course. If the prediction was generally correct, but its quantitative expression exceeded expectations, it can liven up acts on the market trend. If, on the contrary, the forecasts are refuted, the possible course and "turns".
And in different "historical" periods, the interpretation of events can vary. For example, in periods of financial instability "good" statistics on unemployment in the US may not support the dollar, which seems quite natural, but on the contrary, to reduce it, boosting demand for riskier than the U.S. dollar, assets in the hope of investors that the economic situation finally began to improve.
Always follow the existing trends in the analysis of the news. If the news is directed against the trend, it in itself will weaken its effects. Positive for the current trend of news can give him a "boost".
Thus, we once again remind You about the importance of using technical analysis when "the news" trade.
But the market happen and unplanned events with an unpredictable outcome. Weather and geological disasters in some regions can "throw" the currency of these countries.
You should always be prepared for the foreign exchange intervention conducted by some banks to strengthen or, conversely, weakening its own currency. These events although not advertised, but their probability is always discuss currency experts, and attentive traders envisage such a possibility.
|Category: Forex | Added by: (29.10.2017)