In this era where information is definitely an extremely powerful and strategic asset, whether to individuals or corporations, and information equals money, especially for a trader, shutting yourself off from news could be suicidal. Forex is incredibly sensitive to the flow of news that’s linked 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. Traders around the globe earn a living by processing and translating information into money. Financial news services providers know how important news would be to the forex market players, and charge reduced for it. It isn’t uncommon to get a huge selection of headlines of news which are potentially relevant to Forex currency trading from any news company on the average trading day.
Traders, especially those that day trade forex, require the most recent up-to-the-second news updates to be able to facilitate their trading decisions that have to be produced at lightning speed. Placid make use of online financial newswire services such as Dow Jones Newswires, Bloomberg and Reuters, which display the most recent financial news on the computer monitors. Since the speed of news dissemination is very important to traders, many opt for these online instant news services rather than depending on daily newspapers like the Wall Street Journal or the Financial Times which carry stale news that is of little use to traders.
Exactly why news is so important to Forex trading is that each new little bit of information can potentially 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 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 subsequently.
News is an extremely important catalyst of short-term price movements as a result of expected impact it is wearing other market players, and this is in ways an anticipatory reaction for the trader as he or she assumes that other traders will be affected by the news as well.
If the news is actually bullish, say for the US dollar, traders who react the fastest will undoubtedly be among the first to get the us dollar, followed soon by other traders who may react slower to the news or are waiting for certain technical criteria to be met before jumping onto the bandwagon. And you will have those who join in 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 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 since they know that others will be selling, thus pushing the USD exchange rate down. That is based on the assumption that since other traders will be getting the same pieces of news, they’ll be also are generally affected the same way.
Publicly released news is disseminated to the various newswires. Any trader with access to these wires can tap into the information given out, 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 may 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 is 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 may not result in real market action if other players don’t have that information.
Your voice is probably the most powerful tools you possess and utilizing the media is a superb way to get your voice heard. Probably the most profitable and often 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 additionally a lot more credible and believable than advertising given that they appear to come from an objective third party.