In this era where information can be an extremely powerful and strategic asset, whether to individuals or corporations, and information equals money, especially for a trader, shutting yourself faraway from news could be suicidal. Forex is incredibly 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. Traders around the world earn a living by processing and translating information into money. Financial news services providers understand how important news would be to the forex market players, and charge reduced for it. It is not uncommon to get hundreds of headlines of news which are potentially relevant to Forex currency trading from any news company on an average trading day.
Traders, especially those who day trade forex, require the most recent up-to-the-second news updates so as to facilitate their trading decisions that have to be made at lightning speed. They mostly make full use of online financial newswire services such as Dow Jones Newswires, Bloomberg and Reuters, which display the latest financial news on their computer monitors. Since the speed of news dissemination is important to traders, many choose these online instant news services instead of based on daily newspapers just 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 vital that you Forex trading is that each new little bit of information can potentially alter the trader?s perceptions of the existing and/or future situation relating to 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 buying or selling 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 there will be a follow-through in prices when other traders see and interpret the same news similarly that he or she has, and adopt the same directional bias as the trader subsequently.
News is an extremely important catalyst of short-term price movements due to expected impact it has on other market players, which is in a way an anticipatory reaction for the trader as she or he 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 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 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 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 bits of news, they’ll be also are generally affected exactly the same way.
Publicly released Prize is disseminated to the many newswires. Any trader with access to these wires can tap into the information provided, and react accordingly in forex. However, institutional players do get information that retail traders don?t, as 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 industry.
In the wonderful world of Forex trading, there are no rules or restrictions against insider trading! Anyone who possesses information that is 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 one of the most powerful tools you possess and utilizing the media is an excellent solution 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 are not only great marketing tools but also a lot more credible and believable than advertising given that they appear to result from an objective third party.