Current Forex Trading News
Forex News Trading Strategy – How To Trade The News
Trading the economic news in the Forex market is another profitable trading method. It also carries a significant amount of risk. In this trading method, traders trade just before or after the news releases.
The economic calendar is very helpful for this trading method. Traders tend to trade the key economic news releases such as NFP, CPI, GDP etc. This news trading can be short term or long term as the economic news impact can be for short term or long term.
Objectives of News Trading :
The main objective of news trading is to make money from the impact of the news in currency pairs. Some news has a short term effect and some have a long term effect on the currencies. Traders tend to catch the swings from the major movement due to the impact of the economic news releases. The aim of a trader is to get the right direction of the news impact and trade in favour of the news.
Risks of News Trading :
News trading in Forex market carries a significant amount of risk due to high volatility, slippage, fake-outs and short lived price movements. During the major news releases, market becomes volatile and spreads are high which results in slippage in most of the cases. When you fail to enter at a certain market price due to high speed, then it is called slippage. Another major risk is that, market sentiment may shift and the market might not favor the news in the short term.
Key Economic News for News Trading :
Most news traders choose some key economic news releases for news trading. These are,
Non-Farm Payroll report (NFP)
Trade Balance
Consumer Price Index (CPI)
Retail Sales
Gross Domestic Product (GDP) etc.
Best Currencies for News Trading :
There are eight major currencies which are popular for news trading. These eight currencies are,
U.S. Dollar (USD)
Euro (EUR)
British Pound (GBP)
Japanese Yen (JPY)
Swiss Franc (CHF)
Canadian Dollar (CAD)
Australian Dollar (AUD)
New Zealand Dollar (NZD)
The most traded currency pairs for news trading are,
EUR/USD
GBP/USD
USD/JPY
USD/CAD
USD/CHF
AUD/USD
NZD/USD
Types of News Trading :
There are two types of news trading. One is directional bias, and another is non-directional bias.
Directional Bias:
In this type of news trading, traders expect a currency pair to move in a certain direction after the news release. In this case, a trader should know in which direction the pair might move following the news impact. Traders predict the future trend direction by the forecasted economic data and trade in that direction before or after news release. Some traders enter into the position just before the news release to avoid slippage and fake-outs. Some traders want to wait to check the market sentiment towards the news release, and they trade after the news release. In this case, they have to deal with slippage and fake-outs.
Non-Directional Bias:
This type of news trading is widely used in forex trading. This is different from directional bias. In this case, traders usually do not care about the direction of movement as they place both buy and sell orders in breakout points. For example, before NFP news release you place a buy stop order above the resistance and a sell stop order below the support line in EUR/USD. Now if the pair breaks the support line then your sell stop order is executed. If the price of EUR/USD crosses above the resistance line, then your buy stop order is executed. In this way, you can trade a major news release without caring the future possible trend direction. Sometimes market may move against the news. In this case, you will not get a loss in non-directional bias trading as you are aiming to prefer the market sentiment more than the forecasted direction.
Summary:
News trading can be short term or long term depending on the trading style. Some key economic news is very useful for long term trading concepts, such as NFP report. Short term trading might carry more risks than long term trading as the economic condition is reflected in the long term trends. However, short term trading using news releases is also an effective way to make a profit if used in a disciplined way with proper money management. A trader should develop a strategy before starting trading whether he is technical trade, day trader, swing trader or news trader.
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Risk and Stop Loss Orders
You should always use some kind of hard stop loss order that is entered into your trading platform. When your stop losses are hit, it can feel like a slap in the face. If the price then comes back in the direction that you originally wanted it to go, the anguish increases even more. You will need to ignore these feelings and instead be grateful that your stop loss order limited the maximum amount you could possibly lose. Sooner or later you will be grateful that you had the stop in place.
Experts sometimes trade without hard stop loss orders (also sometimes referred to as stop limit orders). They can get away with this because they are experts and because they are probably using little or no leverage. Ignore these methods, for your own safety, and be sure to always use a stop loss or stop limit order.
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FOREX MARKET EUROZONE BLUES
The momentum of market focus has once more shifted back to the Eurozone. 2011 has not been a good year for the Eurozone, as Greece, Spain and more recently, Italy and Ireland just cannot seem to shake the cobwebs off.
The recent announcement by the Greek financial minister that the country has resources to pay salaries only until October is not cheery news at all. Ireland is also being asked to cut down salaries of government workers, one of he highest in the zone in an attempt to get the debt profile of the country to below 10.5% of its GDP.
The recent resignation of the ECBs Jurgen Stark just seems to add to the panic. We saw the Euro tumble against the USD by more than 800 pips since the month of S
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Automated Forex Trading
In the world of trading in the forex market, there are several different strategies you can utilize to maximize your profit potential. One way to minimize your efforts and potentially maximize your profit is to automate the process by utilizing what is referred to as forex robots – automated forex trading systems that can virtually trade for you. Consider it something like a “forex autopilot” program.
When in the market for a forex signal service, research each service carefully. A key feature to look for when researching an automated forex trading system is the adaptability factor. Several different companies (Forex Megadroid, Fap Turbo, IvyBot and others) offer automated forex robot systems. However, the problem with trading solely with automated trading systems is the ever-changing condition of the market. In other words, the market is always changing, and to have a system that performs the same functions repeatedly can create potential problems.
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4 Pitfalls of Demo Accounts
A forex demo account is a very important tool for assessing a broker’s platform, testing your technical analysis skills and lots more. Using a demo account is highly recommended.
Yet it doesn’t fully prepare you for the real thing. Here are 4 pitfalls for demo accounts, and solutions for part of them.
Demo trading doesn’t include execution problems: Even the best brokers with a strong reputation and many liquidity providers cannot avoid a failed execution of your orders. This is reality, especially in extremely volatile market conditions. Execution in demo accounts doesn’t fully mimic real accounts. Unfortunately there’s no solution for this issue, and this doesn’t mean you should skip demo trading. Just be aware of this.
Basics of Forex Market
Basics of Forex Market
The concept of trading on the Forex market is based on the process of buying one currency for another and inverse an operation of selling it, to make profit. You can make such transactions with almost every currency of the world.
Let us analyze some examples.
Example 1: You have 1 600 USD and the exchange rate of GBPUSD is 1.6000, which means that you can buy 1 000 GBP for 1 600 USD. You buy 1 000 GBP, hoping that GBP will rise against USD. After a while, GBP really rises against USD up to 1.6100 for 1 GBP. At such rate, you can exchange 1 000 GBP for 1 610 USD. This way, you have fixed a profit of 10 USD.
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Using Economic Reports in Forex Trading
One thing that affects movements in Forex markets is a country’s economic data reports which are released on a daily basis. Economic measures are part of the fundamental analysis which, together with the social and political events, causes Forex prices to make dramatic swings in the market.
Not all traders use fundamental factors as a price predictor. Professional traders may choose to analyze charts and graphs in order to capture the trend of the market before placing a trade. But for those who do decide to go with economic data for direction, it is worth following a disciplined system in order to understand the information clearly.
As a fundamental trader, you will wake early in the morning and check the economic calendar to see which releases are scheduled for the next day. This information helps you decide whether or not you will move in or out of the market Signals Provider | Forex Signal Providers ,Best Signals Providers
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Automated Forex Trading
In the world of trading in the forex market, there are several different strategies you can utilize to maximize your profit potential. One way to minimize your efforts and potentially maximize your profit is to automate the process by utilizing what is referred to as forex robots – automated forex trading systems that can virtually trade for you. Consider it something like a “forex autopilot” program.
When in the market for a forex signal service, research each service carefully. A key feature to look for when researching an automated forex trading system is the adaptability factor. Several different companies (Forex Megadroid, Fap Turbo, IvyBot and others) offer automated forex robot systems. However, the problem with trading solely with automated trading systems is the ever-changing condition of the market. In other words, the market is always changing, and to have a system that performs the same functions repeatedly can create potential problems.
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FOREX MARKET EUROZONE BLUES
The momentum of market focus has once more shifted back to the Eurozone. 2011 has not been a good year for the Eurozone, as Greece, Spain and more recently, Italy and Ireland just cannot seem to shake the cobwebs off.
The recent announcement by the Greek financial minister that the country has resources to pay salaries only until October is not cheery news at all. Ireland is also being asked to cut down salaries of government workers, one of he highest in the zone in an attempt to get the debt profile of the country to below 10.5% of its GDP.
The recent resignation of the ECBs Jurgen Stark just seems to add to the panic. We saw the Euro tumble against the USD by more than 800 pips since the month of September.
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Understanding ECN Order Flow Trading
ECN or Market-Maker Broker?
Debates over the suitability of ECN versus traditional market-making brokers tend to focus on the following issues, broadly as follows:
• minimum deposit sizes (higher with ECNs)
• spreads (lower with ECNs)
• commissions (higher with ECNs)
• execution (faster with ECNs but at more realistic prices)
• slippage (greater with ECNs)
• exposure to account losses (greater with ECNs)
These are all areas that any trader looking to open a new account should explore before making a final decision as to which type of broker is more suitable, before taking a closer look at the specific brokers themselves.
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Recent Forex Trading Updates -
The $20m option jackpot is still just out of reach despite a kick from US GDP
With USD/JPY now falling from the highs after a big revision to US GDP that 105 option level is looking further and further away. There’s plenty going off today as it is around current levels from 104 to 105. Plenty of time left yet though.
USD/CAD took a double boost from the US figures and the uptick in the headline rate of inflation. USD/CAD rose to the highest since May 2010. We topped out at 1.0738 and are back to 1.0700. While the headline number rose more worryingly the core CPI fell to 101% from 1.2%. This may well lead to the BOC getting twitchy over rates. Adam’s already tipped then as the deflation barometer to watch.
Either way the long term fib level at 1.0802 looms closer now as the dollar continues to drive the pair up.