In the foreign exchange market, forex news trading is a strategy that can help you to earn a good amount of money. While the most talked about strategies revolve around charting and interpreting the charts, here you trade the news that can affect the market and thus influence various currencies. But before you start trading right away, there are a few things that you have to understand. The first thing you have to do is to figure out what news will appeal the most to other traders or brokers. Here are some tips that would help you in forex news trading.
Currency Related News
It would be wise to keep a tab on the news related to currencies. You have to understand if any news or new development is going to affect a country’s currency in order to take advantage of it. Experts and other professionals believe that any issue that influences the U.S dollar gets more importance in the foreign exchange market. Therefore, keep an eye on news related to US dollars if possible if you are interested in trading the news.
Long Term News Trading
Using a forex news trading strategy, there are some occasions when the news can have a long term impact on the market. For example, news about federal banks deciding to regulate the interest rates. News related to unemployment is also likely to affect the foreign exchange market in the long run. In these cases, traders can take a wait-and-watch policy because these situations have long term impact and would not change overnight.
Short Terms News Trading
Short term forex news trading will call for almost immediate action. Traders are more partial to news that has greater surprise value. Many traders base their short term decisions on a few indicators and these include changes in Consumer Price Index (CPI), unexpected change in Fed rates and non-farm payrolls. The last one makes significant impact on the non-farming public and private sector units. Purchasing Manager’s Index too is important as it can bring a sudden change in the economy of various sectors.