How to make profits through forex news trading

Why should we pay attention to foreign exchange tradingnewSmell it?

Countries around the world regularly release statistical data, such as employment levels, gross domestic product (GDP), retail sales, and inflation levels.

These economic data usually reflect the economic health of a specific country and greatly affect the price of a country's currency. Currency is actually a confidence indicator for countries, thereforenewNews releases usually trigger high market volatility, creating multiple opportunities for traders.

the most importantEconomic data release

economynewThe degree to which press conferences affect the market varies. Due to the fact that the US dollar accounts for approximately 90% of all currency transactions, economic news in the United States typically has the greatest impact on the market.

Any countrythe most importantEconomic indicators include central bank interest rates, retail sales, inflation data, unemployment rate, and industrial output.

The market isnewThe initial reaction to a press release usually lasts for 30 minutes to 2 hours, but the broader impact can last for several days.

Choose which currency pair to trade

The main currency pairs (EUR/USD, GBP/USD, USD/JPY, USD/CHF) have the strongest liquidity,GTCforeign exchangeThey have the smallest spread, so they are the preferred choice for news trading. This helps to minimize risk during periods of high volatility.

useeconomic calendar

Many globallyeconomic calendarCan be obtained online, with the economy of the day listed in the calendarnewHeard about the event. Each data release is classified into high, medium, or low levels based on its impact.

In addition, the calendar will list analyst forecasts (integrated forecasts) and previous values.

Traders will observe whether the actual data has reached or exceeded the predicted level. Usually, when there is a significant difference between data and analysis expectations, there will be significant fluctuations.

If the actual data is better than the forecast, the currency usually appreciates. If the issuance is worse than expected, the currency often depreciates.

For example, if analysts expect the US unemployment rate to be 5% last month, and this number is 4.8%, then better than expected numbers usually boost the US dollar.

newWen Trading Strategyomit

transactionnewThere are several different methods of smelling. Firstly, some traders attempt to predict the financial situationnewBased on the published results and predictionsnewConduct transactions before the release of Wen and data.

When predicting economic data, there are some clues that can be found in previous economic data. For example, when predicting employment data in the United States, you canuseThe employment section of the PMI report. If the employment portion in the three reports has increased compared to the previous month, it indicates that the creatednewThe number of positions has also increased.

transactionnewThe second strategy heardomitWaiting for data release and trading based on market reactions to this situation. For example, if retail sales in the United States significantly exceed expectations, it is possible to sell euros/dollars based on the expected strengthening of the US dollar.

The third strategyomitIt does not refer to fundamentals, only considers previous prices. In other words, traders do not predict trends. This common strategyomitIt takes the breakthrough price of the previous price range as the entry point. This can be done for short-term trading during the day or for daily operations.

For example, if the previous price fluctuation range of EUR/USD was a high of 1.2530 and a low of 1.2405, the trader may set a stop loss buy order at 1.2530 and a stop loss sell order at 1.2405. It is expected that if the price breaks above 1.2530, the price will continue to rise, while if it breaks below 1.2405, the price will continue to fall.

newSmelling the risks of trading

In the mainnewBefore the announcement, the buying price usually expands. This increases the cost of entering and exiting the market.

Sliding is another challenge. When you try to enter the market at a certain price, there may be a slippage, but due tonewUpon hearing the extreme fluctuations after the release, you may have actually placed your order at a less than ideal price point.

Volatility is also a major challenge. Even if your judgment of the market direction is correct, sometimes the volatility can be so intense that you may run out of stock.

summary

foreign exchangenewWen Trading provides exciting opportunities and generates frequent fluctuations as a result. Spending time researching the market's response to various economic data will help you better predict future outcomes and provide you with the market insights needed for successful transactions.