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 off from news could be suicidal. The forex market is extremely sensitive to the flow of news that’s linked 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 all over the world earn 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 currency trading from any news service provider on an average trading day.
Traders, especially those who day trade forex, 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 utilize online financial newswire services such as for example Dow Jones Newswires, Bloomberg and Reuters, which display the most recent financial news on their computer monitors. Because the speed of news dissemination is essential 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 pg 168 is so important to Forex trading is that every new little bit of information can potentially alter the trader?s perceptions of the current and/or future situation associated with the outlook of certain currency pairs. When people?s opinions or beliefs are changed, they have a tendency to act on these changed perceptions through selling or buying actions in the forex market. In line with the news, these traders will be preparing to cover their existing positions or even to initiate new positions. A trader?s action is based on the expectation that there will be a follow-through in prices when other traders see and interpret exactly the same news similarly that he or she has, and adopt exactly the same directional bias because the trader consequently.
News is a very important catalyst of short-term price movements because of the expected impact it has on other market players, which is in a way an anticipatory reaction on the part of the trader as he or she assumes that other traders will be affected by the news as well.
If the news happens to be bullish, say for the US dollar, traders who react the fastest will undoubtedly be among the first to get the united states 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 there will be those who join in the buying frenzy at a later stage when they get hold of the delayed news each morning newspapers or from their brokers. This progressive entry of us 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 because they know that others will soon be selling, thus pushing the USD exchange rate down. This is in line with the assumption that since other traders will undoubtedly be getting the same pieces of news, they’ll be also tend to be 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 forex. However, institutional players do get information that retail traders don?t, as they get privy access to order book information within 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’s known and then a select few can and do trade that information in the forex market. Sometimes, such news may give 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 among the most powerful tools you possess and utilizing the media is a good way to get your voice heard. Probably 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 organization news and activities. News releases are not only great marketing tools but also a lot more credible and believable than advertising given that they appear to come from an objective third party.