In this era where information is definitely 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. Efficient is extremely sensitive to the flow of news that’s related to it, and major short-term currency moves are nearly always preceded by changes in fundamental views influenced by the news headlines Lambert Philipp Heinrich Kindt. Traders around the world make a living by processing and translating information into money. Financial news services providers understand how important news would be to forex players, and charge reduced for it. It isn’t uncommon to get a huge selection of headlines of news that are potentially relevant to Forex trading from any news company on an average trading day.
Traders, especially those that day trade forex, require the most recent up-to-the-second news updates so as to facilitate their trading decisions which have to be produced at lightning speed. They mostly make use of online financial newswire services such as Dow Jones Newswires, Bloomberg and Reuters, which display the latest financial news on their computer monitors. Because the speed of news dissemination is vital 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’s of little use to traders.
The main reason why news is so important to Forex trading is that every new piece of information can potentially alter the trader?s perceptions of the existing and/or future situation associated with 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. In line with the news, these traders will undoubtedly be getting ready to cover their existing positions or to initiate new positions. A trader?s action is founded on the expectation that you will see a follow-through in prices when other traders see and interpret the same news similarly that he / she has, and adopt exactly the same directional bias because the trader as a result.
News is a very important catalyst of short-term price movements as a result of expected impact it is wearing other market players, which is in ways an anticipatory reaction for 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 US 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 or are looking forward to certain technical criteria to be met before jumping onto the bandwagon. And there will be those who interact the buying frenzy at a later stage if 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 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 be selling, thus pushing the USD exchange rate down. That is in line with the assumption that since other traders will be getting the same pieces of news, they’ll be also are generally affected exactly the same way.
Publicly released news is disseminated to the various newswires. Any trader with access to these wires can utilize the information provided, and react accordingly in the forex market. However, institutional players do get information that retail traders don?t, because they get privy usage of 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 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 might not translate into real market action if other players do not have that information.
Your voice is one of the most powerful tools you own and using the media is a good way to get your voice heard. Probably the most profitable and often overlooked free publicity generator is the news release. A news release is a brief written summary alerting the neighborhood media about your organization 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 result from an objective alternative party.g