How to trade forex news intelligently

Forex news trading has become the norm amongst all forex traders nowadays. Basically all forex markets are now based on the forex news trading which influence how the forex market prices fluctuate day to day. All traders tend to spend their valuable time on forex market news so as to be able to make a big financial gain. Although this is not always the case with forex news but at first this may seem very easy but it certainly requires discipline and patience so as to risk your capital. Of course just like any other forex trading events all these have got their own risks and so as the forex news trading. It is not guaranteed that every favorable forex news that you obtain will certainly give you bog financial gain the reverse can also be true.

There are several forex news releases that will significantly move markets and these are as follows, Non-Farm Payroll, CPI (consumer price index), Trade Balance, Retail Sales, PPI (Producer Price Index), Interest Rate decisions, GDP (Gross Domestic Product).

These forex news releases often cause a strong effect on the market and they certainly cause a significant movement in the market. It also creates a surprise in the numbers of the market and if the numbers are in line with the expectations this will cause a market now to make a huge movement.

Forex News Trading Strategies

Make it a point that you fully understand the factors that influence the forex trading system, get the latest news about forex trade and understand how to adopt various trading strategies. The more you fully understand how the forex trading system works is the more you will yield great fortune for yourself. It may seem very difficult at first for beginners but you definitely have to do a lot research so as to succeed.

Depending on the forex broker you are able to get margins as low as 0.05% and as high as 4%. For the aggressive forex traders, making use of leverage can yield great profits. Forex traders are able to control their amount of currency through the use of margin accounts. Having a margin account with a forex broker will also give you the opportunity to borrow money from your broker so as to control currency lots.

The common trade news strategy is waiting for a surprise event to happen and then traders try to beat the spike. Of course this is not an easy task as it may sound and most traders are faced with two obstacles;

1) Obtaining the numbers before market movements.
2) Searching for a broker who will execute your orders before market movements.

There are several services available that can deliver numbers to you quickly every month at a favorable fee and one of the very best services is the Bloomberg terminal and this service is very expensive making it exclusion for the small traders. With the use of these services you will certainly get your money back guaranteed because they deliver facts that are accurate so as to enable you to trade and obtain a big financial gain in the market you would have entered corresponding to the forex news releases you would have received. With these services you will certainly find it very easy to trade your capital on any positive forex market and all that you have to do is wait and observe how much gain related to your capital you would have received.

There are several strategies that you can employ for forex news trading and another strategy is known as the ‘fade’. The fade is whereby traders make a speculation on the market that it will significantly move in the opposite direction after a spike. The price would move downwards in the short term after the spike and hence you would have to find the top and this is not an easy task as it requires a lot of practice and discipline.

You can either trade the announcements themselves, or wait a few minutes for the market to settle before re-entering any positions. For example, if an announcement is extremely positive for a particular currency, let's say the dollar, then you may decide to immediately go long on that pair, for example the USD/GBP (or go short on the GBP/USD). Alternatively you could wait a few minutes, and see what your technical indicators say before entering a position.

These announcements can often lead to large breakouts so this is something worth looking out for. You will often find the price consolidates around a certain level in the hours leading up to a big announcement, so if a breakout occurs in the hours immediately after an announcement, it could be a good opportunity get back in and ride the breakout.

You also need to make sure that you only get the best and the most accurate forex news you could possibly get your hands on. One way you can do so is by checking for primary references indicated right before the news itself is presented. If it's from media authorities such as the AP, AFP, or Reuters, then you can be sure that these are authentic pieces of news information. Regardless of which website you see these news, so long as you see such media names written on the article it means that the source of it is credible enough. These media companies place ownership on their articles no matter where it may be published.

Trading purely on news release is harder than it seems, but the task is made easier and more profitable with the use of indicators, such as a breakout indicator as a bollinger band or a breakout of a candlestick or a price bar. Statistics have shown news release can trigger movements that range in size from 33 to 124 pips, leading to trading opportunities.

Conclusion

Forex trade news are very appealing due to the short amount of time that you would have done but just like other forms of trading the forex news trading requires a lot of discipline and patience. This may seem very easy as it may sound but in order for you to make a big financial gain from your capital a lot of work has to be done. However, a lot of practice will certainly guarantee you in making a huge profit margin from your investment.