Thursday, June 29, 2017

Forex News Trading FAQ

February 27, 2012 by  
Filed under Forex FAQ & Latest Post


In today forex faq, we have a question from one of our fellow traders asking me about forex news trading.

Below is the question:

It’s really nice to read the information you post on your website. I really find it very useful for trading, in fact I have learnt a lot from that. Now my question is about trading the news.

Is it worth trading the news?

I cannot guess the direction even after the news results are released on the economic calendar. For example on 30th november “ADP non-farm employment change” was released that affected the USD with high impact. The previous result was 130K, forcast was 131K and actual result came out with 206k. As I understand, USD became stronger. So considering this in mind EUR/USD pair value was supposed to fall down, but it climbed high. This is where i cannot understand how to choose the right direction after the news results are released.  

Also let us know what are the high impact news that can shake the EUR/USD pairs. And which is the best economic calendar to watch the market events. because some calendars show some events with high impact sign and at the same time other calendar shows the same even with low or medium impact. Thats really confusing. Please help us.  

Thank you in advance!

First of all, I am a technical trader and I personally do not trade the news. I find forex news trading too hard to predict. Like what you have said above, you think that the price should fall but it went up instead. There is no reason why because in forex news trading, everything is emotion driven. You may think that the price should fall but other traders who are reading the same news think that the price should rise.

As a result, there are more bull trader then bear trader and therefore the price rises.

If you are serious about forex news trading, you should spend some time to search for courses that teaches you how to trade the news.

I personally is a technical trader who trade based on charts and price movement. I find it more predictable as I can see how the price reacts in the past and then predict the future.

However I do have friends who are news trader and what they are always doing is to catch the momentum of the movement. They do not predict where the price is going to move. They wait for the price to move and then try to catch the momentum.

For those of you who are reading this post and is a news trader as well, do feel free to give your comment below.

Comments

2 Responses to “Forex News Trading FAQ”
  1. subhash says:

    News trading is hard work because the moves after the news release is not a reaction to the news, it is a reaction to the deviation from market expectations. News trading requires careful documenting of news deviations and broker reactions to it, for example if NFP is 100k worse than expectations I want to be trading but my broker will whipsaw the price and I will not get in short.

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