Impact of Economic News on Trading

The forex market is known as one of the most volatile markets as it is highly affected by news from all over the world and forex trading based on news is one of the most popular strategies among professional and novice traders alike. High volatility in the markets and the degree of volatility is determined by the importance of the news, as some traders seek to anticipate the market’s reaction to these news reports and take advantage of these opportunities to achieve successful deals from them. It is significant that market prices will change, either for better or for worse.

Where the trader can take advantage of the news by placing pending orders before the news is released, the platform automatically activates the orders at the previously specified levels even under volatile market conditions, but it is preferable to stay in front of the trading platform during the news release.

Some beginners make a common mistake, which is trying to trade as soon as the news is released. In this case, the trader will face a huge spread in the spread rates, which may reach irrational numbers and cause big losses.

Some traders take action for their transactions after a period of the news’s release, and sometimes the main reaction to the news issued varies during the first few minutes following the news’s release, unless the news is very important. Entering the market long after the news is released and with the start of these regressive movements is not the scenario. Perfect for sure.

The impact of the news on the forex market cannot be ignored, regardless of the strategy followed. The trader’s deals will be affected by it. It is necessary to monitor all the news and take the necessary decisions. Trading on the news achieves huge profit or losses in a very short time, i.e. within minutes of announcing the news. Emotions during the news Fearful traders may fail to act and make the right trading choices because they surrender themselves to an emotional reaction rather than to smart, thoughtful decisions.

Traders must understand that not all events are capable of moving the market, sometimes what is driven by the supply and demand strategy is determined by the traders present in it, the unimportant news reports may not have a sufficient impact on changing the prevailing trend in the markets.

The most important economic events that affect the trading of currency pairs are:

🔸the interest rate.
🔸Inflation rate.
🔸Employment rate.
🔸Purchasing Managers Index.
🔸the consumer price index.
🔸the gross domestic product.
🔸Elections and wars.
🔸Political events.
🔸Federal open market meeting.

You can follow the most important news and learn about the news that greatly affects the movements of the markets through the economic calendar provided by TNFX .    

Join us Now
social trading

What is social trading?

What is social trading?
Social trading first emerged in 2010. It allows investors to access a social trading platform and automatically replicate the trades executed by available professionals on the platform

See More »
Scroll to Top