Why trade the news?

News releases occur many times during the month. They are produced various economic departments all over the world. These issues reflect the economic reality of a given country in the last month. They affect the economic and fiscal policies, as they show what is happening with this economy for the previous month.

What is indisputable, if the economic statistics produced, they create large volatility in the forex market base. For example, economists and analysts survey conducted before these releases and their collective judgment on the basis of market expectations for this release.

The most important economic indicator, which is issued every month, – a report on informal earnings. Posted by the US Bureau of Labor Statistics. This indicator is important as it is with the & # 39 is a measure of the economy's health. Poor record means lower consumer confidence, which means lower costs, which means lower interest rates. This is bad for the US dollar. Alternatively, a strong record of wages means the opposite.

From the point of view of the foreign exchange market, trading in these releases can be very profitable. But it carries huge risks. You can position yourself (to buy or sell currency) before entering the calculation in the hope that you have guessed correctly. However, if you are wrong, the losses that you absorb will be disastrous for your trading account.

There are better ways to trade the news. One way to – wait for the economic numbers and place a trade after the initial volatility has occurred. Volatility – this is the result, as an institution to decide where to place long-term orders, and the market can find the equilibrium price.

The trend is usually formed after the initial instability. If the number was a surprise, you can see a continuation of or reverse the trend.

To achieve success in Forex trading depends on the risk of winning. If you can place a trade in the direction of the main trend, which you will, in the long term make money. However, there are many pitfalls that are involved in trade, and for a new trader, these dangers can be difficult to overcome.

Forex trading – it is more science than art, but if you can identify the risk and place a trade where your lack of trade is small, you generally have a profitable horizon.