subject: How To Trade Forex With Economic News Releases [print this page] For most part of a week, the financial markets are pretty much open round the clock. Perhaps things might slow down towards the weekends but that doesn't necessarily mean all the financial markets are closed. Given the fact that forex is over the counter, traders have access to the markets across different regions which overlap for a certain period of time, thus making the financial markets active almost 24 hours a day.
Given the timeframe, this makes for a great opportunity for traders anywhere in the world to trade the forex markets any time and at any place.
Economic news releases are something of a daily occurance in the forex markets as almost every country has some data that is released. Be it GDP report, or insights on the job/labour markets or the housing markets. Each of these economic news releases tend to influence the respective currency thus providing traders with a great opportunity to take advantage of the news releases that tend to move the forex prices. To clarify, the economic news releases tends to influence currency pairs as well as precious metals and commodities such as Natural Gas and Crude Oil prices.
Economic news releases are an important aspect which is an essential mechanism that pushes the short term pricing while influencing the long term prices as well. Due to the fact that all the forex markets are interdependent, when there is an economic news release that affects the major currency it tends to influence the other currencies as well. To illustrate: A drop in Eurozone's Imports would affect not just the EUR but also the GBP as Britain is Eurozone's trading partner and vice versa.
Of the most important news releases traders and investors usually pay a lot of attention to the UK and US markets as these tend to influence the rest of the currency pairs when there is an increase or a decrease in the bottomline numbers.
When trading forex based on economic news releases, traders should bear in mind that market maker brokers do not allow trading during such times due to the high volatility of the pricing. Even if you place your orders, you would see either lot of re-quotes or order cancellations.
Therefore, if you want to successfully trade forex pairs during economic news releases, it is better to choose an ECN Broker as they allow scalping, which is a strategy used to open multiple trades but with small volumes in order to profit from the price fluctuations.
Trading forex with economic news releases is one of the most common strategies employed by ecn traders as firstly the ecn brokers allow scalping as well as hedging and also provides a great way to make profits quickly. However, if you are not sure or do not have enough trading experience traders should stay out of scalping or trading during economic news releases as you can lose your trades quite quickly because the markets are highly volatile around this time and no one knows how the prices would react.
