subject: Four Information And Events To Watch (for News Trader) And Also The Reasons Why [print this page] 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. 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. Trading Forex news and events is by far one of the most profitable strategies that a trader can use to make massive profits in a short time span. 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. Lets see some of them.
1. US dollar news
A news trader must keenly follow news that involves US dollar so as to remain profitable in the market. 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. To be successful with news and event trading, this is a very hot announcement to keenly watch and follow. It is important for news trading because the employment has a direct impact on the US dollar currency. As already been illustrated the US dollar greatly impact the Forex market. Any other item that affects the US dollar also affects the market in general. When large numbers miss employment, massive moves are expected in the currency prices. However, a trader should take precaution because this effect does not last for long.
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 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 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 balance of trade directly influences the strength of the countrys 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.
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. 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.
