There are a few different strategies that a currency trader can develop: scalping, day trading, swing trading, carry trading and news trading. Many forex traders focus on one particular trading strategy known as News Trading. The basic idea behind trading the news is to profit off the volatility created by economic news announcements. One of the advantages of trading currencies is that the forex market is open 24 hours a day from 5pm EST on Sunday until 4pm EST Friday. Interest rates are the general driver for the markets direction however; Economic data tends to be one of the most important catalysts for short-term movements in any market. This is particularly true in the currency market, which responds not only to U.S. economic news, but also to news from around the world.
Every news trader uses an economic calendar to pinpoint the time and dates of different news releases. Usually, there are no less than seven pieces of data are released daily from the eight major currencies or countries that are most closely followed. So for those who choose to trade news, there are plenty of opportunities. But, as a general rule, since the U.S. dollar is involved in 90% of all currency trades, U.S. economic releases tend to have the most pronounced impact on the market.
Trading news is harder than it may sound. Not only is the previous number important but the projected or forecast number plays a bigger role. Also, some releases are more important than others; this can be measured in terms of both the significance of the country releasing the data and the importance of the release in relation to the other pieces of data.
Every news trader uses an economic calendar to pinpoint the time and dates of different news releases. Usually, there are no less than seven pieces of data are released daily from the eight major currencies or countries that are most closely followed. So for those who choose to trade news, there are plenty of opportunities. But, as a general rule, since the U.S. dollar is involved in 90% of all currency trades, U.S. economic releases tend to have the most pronounced impact on the market.
Trading news is harder than it may sound. Not only is the previous number important but the projected or forecast number plays a bigger role. Also, some releases are more important than others; this can be measured in terms of both the significance of the country releasing the data and the importance of the release in relation to the other pieces of data.
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