Almost all short-term traders base their rulings only on industrial consideration and value charts, regardless of which bazaars they trade in. As a rule, traders completely disregard the basic conditions, and instead observe price trends, investigate the degrees of assistance and opposition, and also observe various signals of industrial indicators.
But the basic research in the current trading society is no less important than the industrial one. Such announcements, as well as information about gains and losses, changes in profit ponds, and economic stagnation, have a chance to have a significant impact on the bazaars. For this reason, trading activity in the news can be very necessary for traders and also significantly increase their trading strategy, in case financial information is added to a purely industrial layout and also the concept of charts. Learn how to trade in new products as well as discover possible trading opportunities in economic markets.
How to read news for trading?
For this purpose, to read the announcements, it is necessary to study together with financial indicators – macroeconomic conditions, which have an impact in all economic markets without exception, be it Forex exchange, promotions, or indices. This has all chances to be changes in profitable ponds, stagnation of the economy, the degree of lack of work or profit of residents of a particular state, and all without exception they have a significant impact on the economic bazaars and the overall situation of the economy.
In financial notices, if traders acquire data regarding past modifications in the bazaars, these conditions are often mentioned directly. This can have an impact on the trading spirit, especially if the published information is not similar to the traders’ expectations.
News trading strategy
The policy of trading in novelties implies selling based on bargaining hopes as well as up to, so as well as after the release of novelties. Trading in novelties can require you to make quick decisions because the impact in economic markets can be almost instantaneous. For this reason, it is necessary to make quick decisions regarding this, as well as trading in novelties.
When trading in new products, it is important to understand how economic bazaars function. In some cases, announcements are previously provided for in the value of the asset. This is because traders are trying to predict the outcome of upcoming news announcements, and the exchange, in turn, responds to this change in the value of the asset. Trading activity in the base of novelties in particular can be useful for volatile bazaars, for example, to trade oil.
Learn more about the application of a thorough consideration of the presence of external conditions within the strategy of trading in novelties.
How to trade the news?
- Register an account. You will immediately get access to a demo account to practice on virtual funds before you top up your account and make real deals.
- Keep up to date with developments in the financial markets. Our news and analytical section is updated daily with articles about forex, stocks, treasury bonds, commodities, and indices written by our market analysts.
- Take advantage of our exclusive news and analytical tools. With a live account, you get access to Morningstar stock analysis reports and Reuters news headlines, which provide rich information on all asset classes.
- Study the appropriate trading strategies for your market. Our guide to the most common trading strategies includes long-term fundamental strategies and short-term price action strategies.
- Consider combining fundamental and technical methods. These two types of analysis can be more effective if used together, rather than relying on just one of them when making trading decisions.
Trade the news in Forex
As well as in the case of other asset classes, Forex trading announcements can be particularly intense before and after major financial events. However, there are significant differences among the types of novelties that distinguish the money bazaars from other economic bazaars.
Forex bazaars, as well as the principle, respond more generally to macroeconomic announcements – actions that display or have a great impact on the economy in general. In general, traders have a chance to evaluate financial announcements to assess their impact on profit rates and monetary policymakers. Announcements that indicate the most “hawkish” (hostile) view of the main bank, increase the price of monetary force about other monetary units, in this case, the period as well as “dovish” (sustained) announcements have all chances to cause a decrease in the direction of the monetary unit.
Monetary units of countries that are large exporters of material or products have all chances to become (subject to the impact of novelties in Forex trading, as it affects the value of the main products that they make. Such monetary units are often referred to as resource monetary units. The values of raw materials, which have a great influence in these monetary units, have all the chances to be exposed to the tasks associated with demand as well as prescription.
In the case of prescription, announcements indicating a decrease in prescription can cause an increase in value, while announcements indicating an increase in prescription can cause a decrease in value, which in turn can have an impact on the proper currency units. Announcements, which have all chance to reflect changes in the prescription, have all chances to be combined with social and political tension, rallies, terrorism, weather, financial penalties, labor relations (strikes), and also prospector. Speculation as well as price formation associated with the demand, mainly affect almost everything from such key novelties, which were described earlier, as well as information regarding commodity reserves as well as monitoring.
Forex news trading strategy
To develop a comprehensive forex trading strategy using news releases, traders usually pay attention to some key forex indicators that can influence interest rate speculation, including:
- Central bank decisions and speeches
- Inflation rate
- Gross domestic product (GDP) data
- Employment data
- Trade balances
News related to market sentiment can also affect the trading of currencies, especially those that are considered “safe havens”, including gold, as well as the major currencies USD, JPY, and CHF. These currencies tend to attract capital during periods of turmoil and outflow when financial markets calm down.
News that may affect risk-versus-risk trading includes the profitability and volatility of stock markets, financial stresses at the national or continental level, political turmoil, elections, contract negotiations, and other broad-based news that goes beyond economic data and central banks. Recent examples are the debt crisis in Greece and the turmoil in the Chinese market.
Forex news trading predictions
Traders must realize that the need for almost all raw materials, and thus, as well as the cost of them, increases and also decreases due to the period of the year. Seasonal announcements of trading in Forex trading and their impact, as well as the principle, are expressed in the relationship of energy and agricultural products, but at the lowest level – in the relationship of precious metals. The table below presents the main resource monetary units as well as commodity products, which they affect. These data have a chance to be used by traders as a specific trader’s signal, allowing them to predict the course of movement of the value of a monetary unit.
How to use news to trade stocks?
Trading in promotions based on the release of new products is a policy used by many long-term investors and also by short-term traders. If the company regularly publishes strong balance sheets, financial flows, and information about the benefits, then the trader can realize the authorization to purchase and also hold the promotional stock for a long period.
But in case the company produces a report with significantly lower economic characteristics than expected, this can provoke the traders the reason for a brief realization of the promotion, as its price decreases. First of all, before realizing the resolution of investing in promotions, traders have a chance to perform research on the company. This includes a study of the possibility of its increase, as well as the possible legal, socio-political, or insolvency risks. Economic ratios, such as price/profit, as well as percentage profitability in addition have all the chances to demonstrate whether this or other activities are considered a profitable investment in a given period.
Our Morningstar promotions intelligence is constantly updated with the latest data on the underlying attributes of the firms. They are readily available for a wide range of promotions shown in our dock, and can also determine whether a unit is overvalued, objectively undervalued, or undervalued in the stock market. This data can help traders decide whether or not to enter into a transaction. Register this result now to gain admission to our Morningstar reports.
In full, announcements that have a significant impact on the promotions of single firms, have no chance to have a significant impact in the monetary unit. The novelties of stock trading, which almost in no way affect the monetary unit, belong to information about gains and losses, changes in the management of companies, mergers and acquisitions, and even partnerships. For this reason, it is easier for certain people to perform the most reliable monitoring regarding this, as well as how the stock exchange will behave.
News trading signals
Certain brokers provide mechanical news trading signals, which have all the chances to help the trader decide the entry, exit, or avoidance of the operation. These signals are based on the swing in value after the release of new products of a particular type and also have all the chances to push the trader to buy or sell the asset.
Observation of future trader’s events with the support of our financial numerator is considered to be a candidate for obedient management. This role is available in our Next Generation debarked and also allows tracking such actions as unemployment, Product, CPI, and PPI, as well as trader information and sample surveys of locations. Without exception, all these actions have a chance to have an impact on the bargaining spirit as well as to generate significant value swings in economic markets.
Your commercial schedule can be set according to the date, the impact in the exchange (from low to high degree), and also the state, which allows you to filter the information so that it is the most suitable for the asset or trade you are interested in. You will also be able to define notifications for single events that you want to follow.
Trading news releases: What are the benefits?
It can help to increase volatility
Certain significant financial positions can be a source of additional volatility in the bazaars, even if this occurs during a short period. Even the neatest chart modifications in Forex trading or stock trading can be synchronized with important trader announcements, such as past announcements regarding unemployment or changes in profitable ponds or stagnation of the economy, made by the state bank.
If you concentrate your interest in such a case, if trader announcements are bound to occur, it is possible to be in a condition, if a thoroughly planned operation takes place as once before a significant event, which immediately leads to a stop-loss triggering. Probably, it is most rational to delay together with the opening of the newest positions already after that, as well as after the news actions have happened, and also then to look, at a single factor is saved for the decision of the operation.
It can trigger unexpected market reactions
As a rule, mainstream economists have a similar opinion about the extent to which, or rather in general, these or other financial data will be posted. Changes in information according to non-farm employment, product, or economic stagnation will have an appropriate impact on the stock exchange. For example, a small degree of joblessness indicates a strong economy, for this reason, almost everyone expects an increase in stock trading. The resolution concerning the decrease of profitable ponds can make the currency of the state less tempting, which will turn to its fall according to the relation to other world monetary units.
However, the period from the period of financial positions is very different from the hopes of extensive bargaining, which is capable of provoking the opposite response of bargaining. For example, if the main central bank suggests the allowable decrease in the pond, but the monetary unit without exception also increases, in this case, probably, in addition to the possibility of changing the profitable pond, there are also other conditions. This, in turn, can be a powerful signal to “buy”. If the monetary unit does not fall in any way in the expectation of a decrease in the profitable pond, it means that the positive sentiment is great, as well as this can talk about it, that now the consumer exchange.
It can indicate that trends are changing
Almost all traders try to establish trends in the belief to acquire income. Such trends have a chance to last for several minutes, days, or even months. But most trends in a particular period occur, as well as the initial indicator of this can be a change in the underlying financial conditions.
Each journey comes together with the 1st step, and this is objective and also for trend reversals. Financial notifications very rarely happen enough to rapidly change the medium-term rate change, but the trading response in the suddenness can be the initial indicator of this, that the mood is accepted to change. This provides traders with the possibility of revealing their views on the very basis of the newest rate change.
Risks of news trading
Of course, there are disadvantages to trading in new products. In particular, trading activity in the news will require the presence of the ability to thoroughly consider, as you should realize how these or other financial announcements have all the chances to influence your views as well as in the economic exchange in full.
In addition, there is a danger of moving positions in the longest period. In case it takes several days or months to release a new product, your trading views may be detected within a few days. This poses a dark danger and can also require you to incur additional costs to maintain your positions. For this reason, traders need to make sure that there is enough money in their accounts to cover these costs.
News trading software
As previously mentioned, our Next Generation trading platform constantly publishes announcements as well as insightful notes according to absolutely all economic bazaars. In addition, I provide information according to the basic review with Morningstar, as well as bazaar notes as well as new announcements with Reuters in the field of novelties as well as inferences used materials of our platform. By watching our updates, you will constantly be in the direction of past trends as well as changes in economic bazaars and general economic notifications.
Our remuneration platform* is available for mobile and tablet devices, including iOS and Android concepts. The mobile add-ons, equipped with all the usual charting functions, allow you to simply trade and watch news alerts in the order of the present period. You can also customize trader notifications for desktop, desktop, and mobile devices as well as choose the method of push notifications via add-on, email, or SMS. Learn more about our trader notifications.
