In this era where information can be an extremely powerful and strategic asset, whether to individuals or corporations, and information equals money, especially for a trader, shutting yourself off from news can be suicidal. The forex market is extremely sensitive to the flow of news that is linked to it, and major short-term currency moves are nearly always preceded by changes in fundamental views influenced by the news headlines Lambert Philipp Heinrich Kindt. Traders around the globe make a living by processing and translating information into money. Financial news services providers understand how important news would be to the forex market players, and charge reduced for it. It is not uncommon to get hundreds of headlines of news which are potentially relevant to Forex currency trading from any news service provider on the average trading day.
Unconventional , especially those that day trade forex, require the latest up-to-the-second news updates so as to facilitate their trading decisions which have to be produced at lightning speed. They mostly make full use of online financial newswire services such as Dow Jones Newswires, Bloomberg and Reuters, which display the latest financial news on the computer monitors. Because the speed of news dissemination is essential to traders, many opt for these online instant news services rather than based on daily newspapers like the Wall Street Journal or the Financial Times which carry stale news that’s of little use to traders.
Exactly why news is so vital that you Forex trading is that all new little bit of information can potentially alter the trader?s perceptions of the existing and/or future situation associated with the outlook of certain currency pairs. When people?s opinions or beliefs are changed, they tend to act on these changed perceptions through buying or selling actions in forex. In line with the news, these traders will be getting ready to cover their existing positions or to initiate new positions. A trader?s action is based on the expectation that there will be a follow-through in prices when other traders see and interpret exactly the same news similarly that he / she has, and adopt exactly the same directional bias as the trader because of this.
News is an extremely important catalyst of short-term price movements as a result of expected impact it is wearing other market players, which is in a way an anticipatory reaction for the trader as he or she assumes that other traders will undoubtedly be affected by the news headlines as well.
If the news happens to be bullish, say for the united states dollar, traders who react the fastest will be among the first to buy the us dollar, followed soon by other traders who may react slower to the news headlines or are looking forward to certain technical criteria to be met before jumping onto the bandwagon. And you will see those who join in the buying frenzy at a later stage when they get hold of the delayed news in the morning newspapers or from their brokers. This progressive entry of us dollar bulls over a period of time is what sustains the upward move of the united states dollar against another currency, with the USD exchange rate going higher against other currencies. The reverse is true for bearish news, traders will sell because they know that others will be selling, thus pushing the USD exchange rate down. This is based on the assumption that since other traders will be getting the same pieces of news, they’ll be also are generally affected exactly the same way.
Publicly released news is disseminated to the various newswires. Any trader with usage of these wires can utilize the information provided, and react accordingly in the forex market. However, institutional players do get information that retail traders don?t, because they get privy access to order book information in their computer systems, and could also know a thing that others don?t through their personal contacts in the market.
In the wonderful world of Forex trading, you can find no rules or restrictions against insider trading! Anyone who possesses information that’s known only to a select few can and do trade that information in the forex market. Sometimes, such news can provide an unfair advantage to these institutional players, but at other times, this isolated news access might not translate into real market action if other players don’t have that information.
Your voice is probably the most powerful tools you possess and using the media is a fantastic solution to get your voice heard. The most profitable and frequently overlooked free publicity generator is the news release. A news release is really a brief written summary alerting the local media about your business news and activities. News releases are not only great marketing tools but additionally a lot more credible and believable than advertising given that they appear to come from an objective alternative party.