NewsWatch TV Reviews

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DOES FOREX NEWS TRADING REALLY WORK?

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NEWS STORIES OR THE RELEASE OF MARKET DATA.
WHENEVER MAJOR NEWS IS RELEASED, THE MARKET WILL
INVARIABLY RESPOND. THE QUESTION IS WHETHER THE
MARKET WILL RISE OR DECLINE BASED ON THE NEWS. MANY

TRADERS WILL TRADE BASED ON THEIR BELIEF ON HOW THE

MARKET WILL RESPOND. THERE IS ONLY ONE QUESTION
THAT CAN BE ASKED ABOUT NEWS TRADING. DOES FOREX
NEWS TRADING REALLY WORK?
MOST MARKETS WILL HAVE SLIGHT MOVEMENT PRECEDING

THE ANNOUNCEMENT OF MAJOR NEWS EVENTS THAT ARE

REGULARLY SCHEDULED. THESE EVENTS MIGHT BE THE

RELEASE OF MARKET INDICATORS OR UNEMPLOYMENT

NUMBERS. THIS IS BECAUSE THERE WILL BE RUMORS ABOUT

WHAT THE ACTUAL NUMBERS TO BE RELEASED WILL BE

LIKE. TRADERS WILL THEN PLACE A POSITION BASED ON

HOW THEY FEEL THE MARKET WILL RESPOND IF THESE

RUMORS ARE TRUE.

THE FOREX MARKET PLACE IS OPEN FOR TRADING 24
HOURS A DAY. ANY NEWS ANNOUNCEMENT IN ANY COUNTRY

DURING THE DAY OR NIGHT WILL IMMEDIATELY HAVE AN

IMPACT ON THE CURRENCY MARKET. USUALLY THE MARKET

WILL HAVE A SLIGHT CHANGE JUST PRIOR TO THE NEWS
ANNOUNCEMENT AND THEN THE MARKET WILL HAVE A

GREATER CHANGE AFTER THE NEWS ANNOUNCEMENT.

WITH FOREX NEWS TRADING A TRADER IS BASICALLY

TRYING TO SPECULATE ON THE IMPACT OF THE NEWS

ANNOUNCEMENT. THERE IS NO QUESTION THAT MAJOR

NEWS ANNOUNCEMENTS CAN HAVE A PROFOUND IMPACT ON

THE FOREX MARKET PLACE. THIS IS WHY MOST FOREX

TRADERS WILL TRY TO CAPITALIZE ON THE RELEASE OF

MAJOR NEWS ANNOUNCEMENTS.

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INVESTORS ALREADY FOLLOW THIS STRATEGY. SINCE THERE

IS A WIDE NUMBER OF TRADERS INVESTING BASED OFF THE

NEWS, THE MARKET IS QUICK IN RESPONDING TO THE
CHANGE FROM THE ANNOUNCEMENTS. THIS QUICK CHANGE

IN THE MARKET LIMITS THE ABILITY FOR TRADERS TO

PROFIT FROM THE NEWS ANNOUNCEMENTS. FOR THIS
REASON MANY PEOPLE DO NOT THINK FOREX NEWS
TRADING IS A PLAUSIBLE STRATEGY.

UNLIKE OTHER TRADING STRATEGIES, FOREX NEWS

TRADING DOES NOT REQUIRE ANY TECHNICAL ANALYSIS OF

THE MARKET. SINCE MOST NEWS ANNOUNCEMENT HAPPEN

VERY RARELY THERE IS NO TECHNICAL ANALYSIS MODEL

THAT WILL BE ABLE TO ACCOUNT FOR THE INTRODUCTION

OF THE NEWS. THIS ALLOWS A TRADER TO USE OBJECTIVE

REASONING IN ORDER TO DETERMINE HOW TO PLACE THEIR

TRADES IMMEDIATELY BEFORE AND IMMEDIATELY AFTER

THE ANNOUNCEMENT OF MAJOR NEWS.

MOST NEWS ANNOUNCEMENTS HAVE A SHORT TERM
IMPACT ON THE FOREX MARKET PLACE. VERY FEW

NEWS ANNOUNCEMENTS WILL HAVE A LONG TERM

IMPACT ON THE MARKET. WITH THE NEW
ANNOUNCEMENT HAVING SUCH A SHORT TERM IMPACT,

TRADERS WILL LOOK TO QUICKLY MOVE IN AND OUT OF

POSITIONS. THE IMPACT OF THE NEWS MAY BE FELT
FOR ONLY A DAY OR SOMETIMES LESS. YOU DO NOT

WANT TO HAVE A LONG TERM POSITION IF YOU

TRADING BASED ON NEWS.

A GOOD STRATEGY TO FOLLOW WHEN FOREX NEWS

TRADING IS TO PLACE TWO ORDERS ON BOTH ENDS OF

THE CURRENT MARKET PRICE. IF THE MARKET MOVES

UP THEN YOU CAN KEEP THE ORDER THAT PROFITS

FROM THE MOVE AND CANCEL THE OTHER ORDER THAT

IS BELOW THE CURRENT MARKET PRICE. THIS ALLOWS

YOU TO PROFIT REGARDLESS OF WHETHER THE

MARKET RISES OR DECLINES.

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