This is my second article about the new economic trading in forex. In the first platform, I shared my specific method on how to negotiate new in Forex. In it, I would continue to talk to her, but this time to focus on the more general things that any beginner in trading is to know. J desire to share the experience I have gathered through six years of trading Forex. In fact, when I started a Forex trader I did by trading press releases.Major currencies
To begin, we need to know which are the most important currencies in terms of economic news trading. I would single out 8 forex pairs. What are these 8 major currencies That Often forex traders watch for economic news releases and how events impact thesis different securities.
The eight major currencies are as follows:
1. AMERICAN Dollar (USD)
2. Pound sterling (GBP)
3. Euro (EUR)
4. Swiss Franc (CHF)
5. Japanese Yen (JPY)
6. Canadian Dollar (CAD)
7. Australian Dollar (AUD)
8. New Zealand Dollar (NZD)Trading economic news | non farm payrollsMajor economic news releases
The major pairs such as eur / usd, gbp / usd, usd / cad and crossovers such as eur / cad, eur / aud are strongly influenced by press releases and the task of a trader is to profit short-term price fluctuations caused by the release of the new key announcements. There are many new listings that cause significant in the most important currency movements, that any trader trading currencies should be aware of are:
1. Interest rate decisions by Central Banks
2. GDP
3. Trade Balance
4. Unemployment data
5. Inflation
6. Retail sales and manufacturing
7. The Business Confidence
8. The Consumer Confidence
Although I mentioned that 8 j 'most important new parts, the first five are those that cause strong reactions after the announcement of news.Trading of new economic inflation report from GBDifferences between planned and actual
The most important news of the most moving, you can expect. Differences between the planned and the real causes of movements. Let BNL due out today. The expected number is 120 thousand workplaces were created. When the news comes we find that nothing has been created and 10,000 workplaces have been lost. This type of discrepancy between expectations and implementation can cause an outcry in the market and currency pairs will begin to fly up and down.
If the news is not on the market in the first half an hour, there is a strong possibility that there will not be significant in the share price for the rest of the day. If your order has not yet been opened, you can reduce your position, if it is open, or remove it completely. If the news is not on the market do not trade.
The key to trading on economic news is to take advantage of these movements in volatility which can last a few minutes or hours or even days in the future.Buy the rumor, sell the fact
Markets move on expectations of future events, Often When the actual economic events or news release happens, the move is over Either gold ready to go the opposite the direction That the news report implied. This is Where We can remember the term "buy the rumor sell the fact". HOWEVER, most is traders do not. They get stuck on one Easily Specific new economic report that looks like it Could really move the market in a clear direction. HOWEVER, if you form Specific attitudes to what might happen based on a news event and your intuition and start believing your Assumptions You Will probably destroy your forex account Rather sooner than later. Trading in new economic reports you only Have to follow the market and go towards whichever it goes. Technically you trade the news.The European and American trade sessions
So, what else one Has to Have in mind while new economic trading? As I said in my previous article, mostly traders react to Those pieces of news All which are of high importance. HOWEVER, Those That Consistently watch share price around news events mostly That Will instructions and data from U.S. Those countries All which Their macroeconomic data release falling on European and U.S. sesions affects the markets. Because the USD is a backer in Nearly 90% of all transactions on the Forex, the release of key economic indicators from the U.S. are always significant to the currency exchange rates. Europe Consists of many member states and data All which comes from one of member state is not very significant even if it is marked as Such, Because It Does not Reflect economic status of the whole area. In terms of Europe, I mostly concentrate on ECB interest rate announcement and other European trade announcements only in crosses: such as eur / gbp gold gbp / chf.
Data from Britain and Canada often has more impact. I have seen many times how the data medium importance and created a lot of volatility caused large movements in Canadian dollar pairs. From my experience, I can say that the Australian data which is marked with the highest importance on price moves in 1 in 4 cases. He rarely has an immediate reaction in the market and an operator could also be a technical trade, regardless of himself on fundamentals. So a novice trader should focus only on the European and U.S. sessions data.My first steps in economic news trading
When a friend of mine Told me about Forex six years ago I was very inspired and got into the market Effective Forex trading demo account for a pair of months. Forex trading Seemed so exciting That I pulled all my money out of Lithuania Stock Exchange and feels it to an American retailer Forex. I Could say That I Knew what I was going to do. As I watched price action in forex market I saw lots of movements around financial news events. At That Time Non Farm Payrolls Would releases because some currency pairs to move 200 pips Within A Few Effective the second announcement. I made some trades on my forex demo account, got some nice paper profit and cyber Decided That there was no more time to waste. It was the time to make millions. After trading some economic data of medium importance I got a FEW bucks of profit. I Could hardly wait for NFP to come out. Finally the big day cam. 30 minutes before the release I Placed my order buy 30 pips above the price and my sell order 30 pips below the price. And then Waited ... . 2 minutes before the news Moved down the price and my sell order was opened and then When the news cam Moved it up so fast That my Forex broker was not ble to close my sell order and open my buy order. The price just jumped through my stop loss and it was not triggered. It was a price gap All which happens occasionally falling on economic news releases. So, I was sitting and watching as 20 percent of my account was wiped away withing 10 seconds. Fortunately, I was finally ble to close my position and manually open an order in the opposite direction. In this way I Somewhat Recovered from my loss. Later I wrote a letter of complaint to the broker and he compensated the loss That I victimes due to His Inability to close my position. So, in the end I did not have any loss. Goal this taught me a lesson to be more carefull while trading economic news releases, to limit the risks and think a alterntive strategies in Forex trading.Economic News for the month of February 13 February 19, 2011
Economic news All which can causes volatility in financial markets Particularly forex market and can be traded using economic news trading system:
Monday
The data comes Monday is average size and I do not expect solid moves in a currency pair.
Tuesday
Australian dollar pairs: AUD Reserve Bank Board Minutes (FEB)
Pairs in Japanese Yen: JPY Exchange Bank of Japan Decision (FEB)
Sterling pairs: GBP Price Index to (y / y) (January)
Euro pairs: EUR Euro Zone Gross Domestic Product (quarterly) (4Q)
U.S. dollar pairs: USD Prerequisite for Retail (JAN)
Wednesday
Pounds sterling pairs: GBP Requests Insurance Unemployment Change (January)
Sterling pairs: GBP Bank of England Inflation Report On
Thursday
U.S. dollar pairs: USD Consumer Price (y / y) (January)
Friday
Pounds sterling pairs: GBP Retail Sales (m / m) (January)
In Canadian dollar pairs: DAC Consumer Price Index (y / y) (January)My daily economic news commentary
Tuesday, February 15, 2011
As I indicated in the Economic calendar I expected economic news from Great Britain to major moves in pound peers involved. About did move and Strengthened Pound across the board. You Could have any pound traded profitably even had you Followed technical rules written in my hub about my forex trading system. As I am a great admire of gbp / jpy (due to its' high volatility) I am the safe trade in the pair Would Have beens best. Of course, the pip value in this pair is smaller than in the majors, the goal distance gbp / jpy travels a day is much bigger than That of other peers. In fact, if you Looked at 4 hour chart of the pair, You Could See That year the pair Continued upward trend That It has-been in since the Beginning of January. From the technical points of view there Could have been other possibilities, purpose since the article is about new economic trading I am not going to expand on other trading systems.Example of gbp / jpy trade economic newsWeekly economic news forex news and analysis (in terms of new economic news and forex trading strategy)
Monday. There was no economic impact or forex news Monday that would cause major shifts in currency pairs. Majors continued to rise against U.S. dollar with a few times in eur / usd pairs and commodities.
Tuesday. Economic news from Britain was such a case indeed. When the report was released gbp / usd recovered and you could have easily around 50 pips if you have negotiated the release.
Wednesday. Economic news from Canada (Bank rate decision) has created huge moves in Canadian Dollar pairs. This piece of news forex Canadian dollar caused collapse across the board causing a reversal even usd / cad, which was going down the week before. You might have negotiated cad pair and made some nice profit (provided they follow technical rules).
Thursday. There was a lot of economic news from various countries. All the data That I have outlined major currency pairs Moved previous week a lot. Consumer price data from Great Britain pound peers feel all down. gbp / usd fell 50 pips Effective the news was released. The same happened to other peers pound. Data from Canada Continued pushing Canadian dollar down. From the time of the release up to now, usd / cad pair Went up around 70 pips and continued climbing. This is true about other cad peers. All of them falling Continued. Data from New Zealand Basically met expectations. HOWEVER, kiwi peers started falling hours before the news release. And when to the news was released They Weakened even more. All of the events Could have been traded profitably using economic news trading strategy.
5. Friday. Even though Friday is the MOST Usually volatile day of the week, this Friday was an exception. No data produced moves in currency pairs. Majors Continued pushing dollar down. Were there some mixed reactions to economic news from Canada, usd / cad fell, other peers Strengthened against the loonie.
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