In this era where information can be an extremely powerful and strategic asset, whether to individuals or corporations, and information equals money, specifically for a trader, shutting yourself faraway from news could be suicidal. Forex is extremely sensitive to the flow of news that’s related to it, and major short-term currency moves are almost always preceded by changes in fundamental views influenced by the news headlines Lambert Philipp Heinrich Kindt. Backbone around the globe make a living by processing and translating information into money. Financial news services providers understand how important news is to forex players, and charge a premium for it. It isn’t uncommon to get hundreds of headlines of news that are potentially relevant to Forex currency trading from any news company on an average trading day.
Traders, especially those who day trade the forex market, require the latest up-to-the-second news updates in order to facilitate their trading decisions that have to be made at lightning speed. They mostly make use of online financial newswire services such as for example Dow Jones Newswires, Bloomberg and Reuters, which display the most recent financial news on the computer monitors. Because the speed of news dissemination is very important to traders, many choose these online instant news services instead of depending 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 important to Forex trading is that every new piece of information could alter the trader?s perceptions of the current and/or future situation relating to the outlook of certain currency pairs. When people?s opinions or beliefs are changed, they tend to act on these changed perceptions through selling or buying actions in the forex market. Based on the news, these traders will undoubtedly be getting ready to cover their existing positions or even to initiate new positions. A trader?s action is founded on the expectation that there will be a follow-through in prices when other traders see and interpret the same news in a similar way that he / she has, and adopt exactly the same directional bias because the trader therefore.
News is a very important catalyst of short-term price movements as a result of expected impact it has on other market players, which is in ways an anticipatory reaction on the part of the trader as she or he 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 united states 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 interact the buying frenzy at a later stage when they obtain the delayed news in the morning newspapers or from their brokers. This progressive entry folks dollar bulls over a period of time is what sustains the upward move of the US dollar against another currency, with the USD exchange rate going higher against other currencies. The reverse is true for bearish news, traders will sell since they know that others will soon be selling, thus pushing the USD exchange rate down. This is using the assumption that since other traders will undoubtedly be getting the same pieces of news, they will be also are generally affected the same way.
Publicly released news is disseminated to the various newswires. Any trader with usage of these wires can tap into the information provided, and react accordingly in the forex market. However, institutional players do get information that retail traders don?t, as they get privy access to order book information in their computer systems, and may also know something that others don?t through their personal contacts in the market.
In the wonderful world of Forex trading, there are no rules or restrictions against insider trading! Minimalist who possesses information that’s known and then 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 may not translate into real market action if other players do not have that information.
Your voice is among the most powerful tools you possess and using the media is a wonderful way to get your voice heard. The most profitable and frequently overlooked free publicity generator may be the news release. A news release is really a brief written summary alerting the neighborhood media about your business news and activities. News releases aren’t only great marketing tools but also a lot more credible and believable than advertising since they appear to come from an objective third party.