Forex news is one of the important factors affecting market fluctuations if you know how to analyze and trade according to forex news. Traders can take advantage of profit opportunities from strong fluctuations. However, this way of trading requires traders to have knowledge and skills to ensure safety. In this article, Learn Forex Trading will provide you with the necessary information about forex news.
What traders need to know about Forex news
Before taking advantage of market news to trade effectively. Traders need to understand some basic information about forex below.
What is Forex news?
Forex news is information about economic, political, and social events, natural disasters, wars, etc. of countries and regions around the world. Affects the value of currencies. News is often published on a schedule, predicting the level of impact on the market. Market news can also be unexpected and unpredictable information. This causes unusual and strong fluctuations.
Basic types of forex news traders need to know
News can be classified according to many different criteria. However, one of the most common classifications is the degree of impact on the market. Accordingly, forex news can be divided into 3 main types:
- High-impact news: news that has the potential to cause large and lasting fluctuations in the market. Usually related to important economic indicators such as interest rates, GDP, CPI, NFP, Fed interest rate decisions, US employment reports, etc.
- Medium impact news: news that has the potential to cause moderate and short-term fluctuations in the market. Often related to additional economic indicators, such as manufacturing, retail sales, consumer confidence, etc. For example: the PMI index, retail sales index, etc.
- Low-impact news: news that has the potential to cause small and temporary fluctuations in the market. Includes factors related to less important economic indicators. Including house prices, number of unemployment claims, etc.
See more: Summary of new updates on Forex trading platform
Popular Forex news channels
To follow and update. Traders can use many different forex news channels, such as:
- Economic calendar: A useful tool for traders to know in advance what news will be announced in the day, week, month, etc. Includes information such as release time, relevant country, economic index economics, forecasts, previous results, level of impact,…
- Forex news websites: These are websites that specialize in providing the latest, fastest, and most accurate forex news, including scheduled news and unexpected news.
- Social networks: Where traders connect and exchange with others such as Facebook, Twitter, Telegram, etc. Social networks are a rich and diverse source of news because traders can follow accounts, groups, and channels of professional experts, analysts, and forex brokers.
Opportunities and risks when trading according to Forex’s new
The volatile forex market always contains many opportunities and risks for traders.
Opportunity
Trading according to Forex News is a popular and attractive trading method for many traders. Brings many great opportunities such as:
- Take advantage of strong fluctuations: news is one of the factors that causes the largest fluctuations in the market. Especially high-impact news. If traders can forecast the direction and level of market volatility before the news is announced. From there, you can take advantage of opportunities to profit from these fluctuations. At the same time, combine with forex bonus from the exchange to maximize profits.
- Increased ability to analyze the market: news is one of the important sources of information for traders to analyze the basic market. That means analyzing economic, political, and social factors, etc. that affect the value of currencies. From there, it is possible to make more accurate judgments and forecasts about the direction of the market.
- Suitable for many trading styles: news can be used to trade in many different styles, depending on the trader’s goals, time, skills, etc.
Risk
Trading according to news is not without risks. Traders need to pay attention to the following risks when trading news:
- Encountering unusual fluctuations: news can cause unusual and unpredictable fluctuations in the market, especially unexpected and unpredictable news, such as natural disasters, wars, crises,…
- Facing technical factors that are difficult to control: news can also cause technical factors that are difficult to control when trading, such as spreads, slippage, requotes, etc. When there is news, the market often has demand. high transactions, causing the spread between bid and ask to increase, causing traders to incur higher transaction costs.
- In addition, due to the rapid pace of market fluctuations, traders may encounter the phenomenon of slippage. That is, the difference between the desired price and the actual price when executing the order. Therefore, traders cannot trade at the best price.
How to analyze forex news for effective trading
To trade forex news effectively. Traders need to have a reasonable and scientific way of analyzing.
Basic market analysis when trading the news
Basic market analysis is the first and most important step when trading the news. The reason is that it helps traders understand the factors that affect the value of currencies. From there, it is possible to predict the direction and level of market fluctuations. To analyze the market fundamentally, traders need to do the following:
- Follow the economic calendar.
- Forecasting news results.
- Forecasting the impact of news.
Technical analysis goes hand in hand with forex news analysis
Technical analysis is the second and complementary step to fundamental market analysis. This helps traders identify important price levels, patterns, indicators, etc. on the chart. From there, you can make more accurate trading decisions. For technical analysis, traders need to pay attention to the following factors:
- Determine the market trend.
- Provide trend forecasts of support and resistance points.
- Take advantage of technical patterns and indicators.
Analyze forex news before publication
Analyzing before its release is a popular and safe way to trade the news. This helps traders avoid risks caused by unusual fluctuations. At the same time, controls technical factors that are difficult to control when news is announced. To analyze forex news before its release, traders should note:
- Choose the right currency pair.
- Determine trading direction.
- Set appropriate pending orders.
How to place effective orders when forex news is announced
This is a risky way of trading news. The reason is that traders have to face strong and rapid fluctuations, as well as technical factors that are difficult to control when news is announced. When forex news is announced, traders should pay attention to the following things while placing orders:
- Continuously monitor the results of the news.
- Respond quickly to news results.
- Risk management when trading the news.
See more: Instructions for registering an XTB account
Experiences for traders when trading with Forex news
Trading on news is an attractive but also risky trading method. Requires traders to have appropriate skills and strategies.
- Choose high-impact news: traders should choose high-impact news to trade. These are the causes of large and prolonged fluctuations in the market, bringing great profit opportunities.
- Choose suitable currency pairs: Investors should choose suitable currency pairs to trade according to the news. These currency pairs are related to the country in which the news is published.
- Choose appropriate trading styles: Traders should choose trading styles that suit their goals, time, skills, etc. when trading the news. In addition, you should trade in combination with technical analysis, psychological analysis, etc.
- Always update and learn: The forex market is a volatile and complex market, with many factors affecting it. Traders should always follow and update the latest forex news from reputable forex channels.
Above is the information and experience that Learn Forex Trading shares with you about Forex. Hopefully, this article will help you gain more knowledge and skills to trade news effectively and safely.
FAQs:
What is Forex news?
Forex news is information about economic, political, and social events, natural disasters, wars, etc. of countries and regions around the world. Affects the value of currencies.
What are the popular forex news channels?
To follow and update forex news. Traders can use many news channels such as economic calendars, forex news websites, popular social networking sites,…
What are the opportunities for trading according to forex market news?
Traders have many opportunities to make profits when trading the news. These include taking advantage of strong fluctuations, increasing the ability to analyze the market, and being suitable for many trading styles depending on the trader’s goals, time, skills, etc.
