FxMAC LESSON 1: UNDERSTANDING AND TRADING THE NEWS
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This presentation is about Trading the News.
Most of the Forex investors are now very interested to know more reviews about: Trading the News.
It’s very interesting the fundamental analysis.
So, the news in the Forex Market is very economically centered.
Let’s say for example something from the stock market which can be analysis Oriental statements economically oriented. Financial statements, income, earnings, proprieties, etc.
So, in the Forex we get a lot of economically centered news. One of the other advantages that we have as News Traders or is Traders who are interested in the News in the Forex is that it’s very predictable.
So now, we have to clarify this a little bit. It doesn’t mean that we know what we know what the News is going to say, but do know what is going to come out. From our experience as a little bit less of the surprise announcement in the Forex, than there is another Capital markets where you are looking at very, like an individual company.
So now, what it means though, it’s that we know exactly when those announcements are going to come out.
So, this is important because one of the things that we need to be very aware of as Forex Traders are when is that is going to be out, because one of the things we can rely on that if we don’t really know the results in advance, but it’s that it’s very predictable that there will be volatility.
So, price actions are going to be accelerated during the big announcements (the volume).
Let’s take a couple of Classics there are Nonfarm Payrolls in the US. It’s typically accompanied by volatility.
What that means is that if you are looking when the News are going to come out, then you can start to look for big announcements, whether that means the Nonfarm Payrolls report US or the CPI report coming out of the UK, or whatever it is.
You know when you should be paying attention to your trades, because you may want to take some action. You may either want to enter in your position if you’re long and volatility subsequently resolves to the up side and you may want to add some to that this position. Or conversationally the volatility finally works out to the down side and you may want to remove some of your market exposure or had a hedge and diversify a little bit.
The great thing about it’s that you can predict when does volatility is likely to occur, if you can necessarily to predict which direction it’s going to go. Still very, very, helpful and extremely important.
Now, when do we get that volatility, when we get those announcements, then we know in advance where are they coming from because we can look at it on the economic calendar, News calendars.
So, then you can check them out what’s coming up in over the next week, in a daily routine. But not only it’s going to happen today, but also what’s is going to happen in a week.
It’s really easy and to just forget and depending on what your training, some of those announcements that you don’t normally pay attention to, it may become very important if you’re trading one of those classes or a particular currency, that will respond very abruptly to that particular announcement.
So, it’s good always to have fresh in your mind, if you don’t know what something is, look and investigate by yourself
So, what about the news itself, we can see when it’s coming on the calendar what about what the News actually was, what were the numbers, etc
We would suggest doing two things, one make sure you have your mt4 platform open on the day that you’re looking at the news reports itself.
So, the if you are looking for example to the CPI release went out. The vantage here is not only what the response is, which will be immediate in the price action. So you be able to see what’s going on in the charts, but then in the terminal in the MT4 application, there is a News tab.
You can see exactly what’s going on as the News is released
So, once again, the reason why would trade the News or why the news matters to our trades in the Forex. It’s not so much to predict the future. It’s a matter of the vantage that we have are we know what type of News are important where we need to be educated, also, we know approximately when it’s going to come out. We can use calendar to plan our trade and we can typically relay on some volatility, so, we can increase price actions, which can result in one of two things.
At the one, it can be an opportunity to enter a trade, typically see a lot break outs and technical patterns as well it can be maybe a period of time, that we can recover some of our market exposure risk, which we all know in advance.
So, these are the ways in which Forex Traders are really paying very close attention to the news and as you become more experience in the Forex, you can start to really develop a feeling of what one of the trends are going to be in a particular announcement, what’s really going on over the longer term, because it can help you to understand how solid is the underline trend in this current currency pair.
We are getting a longer-term view of a lot of bad announcements in a row. Maybe the individual announcement in a little bit random as far as price action but over the longer term we can get an idea of how is going to impact in the long term, what trading actions should I be taking in a particular currency pair, what kind of trades should I be looking for.
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