Trading after an economic news release is an interesting trading strategy Forex traders apply commonly. For short-term movements economic state is a vital catalyst, which responds to financial news from all over the world.
Vortex Assets trading platform provides 52 currency pairs along with host of indices, stocks, and commodities. Therefore there is often some press release, which traders make use of. Among the 8 major currencies maximum seven countries release financial data daily. Therefore for traders interested in trading on news release get plenty of opportunities.
It is necessary to understand when and which news release is relevant to FX investors. How do they need to act on these fluctuating movements in the trade market?
For example,
Some major currency pairs
- EUR/USD
- AUD/USD
- USD/JPY
- EUR/CHF
- GBP/JPY
- CHF/JPY
This currency list spans the entire globe, so you can pick currency pairs and news release that you find interesting and keep track. A golden rule to keep in mind is that US economic releases can impact all currency trades significantly, as it dominates other currencies.
If you plan to trade on news release then pay extra attention on the time most important economic news are released. (You will find approximate time list of each country online).
What are key releases?
First keep track of which economic releases are expected that week, so you can get to know which information is vital. Some key releases traders need to watch for are –
- Retail sales
- Interest rate decision
- Industrial production
- Unemployment
- Inflation
- Consumer confidence surveys
- Manufacture sector surveys
- Business sentiment surveys
- Trade balance
- Non-Farm payrolls
- GDP figures
The virtual importance of these economic releases can fluctuate due to existing economic condition. For example, this month inflation may be vital than interest rate decisions or unemployment. Therefore watch the market movements and prepare a trading strategy. You can use training resources like watch seminars and webinars on Vortex Assets website.
How long economic release effect last on Forex market?
Market reaction on any kind of data is not predictable. The volatility cannot be forecasted, when news headlines get announced and when the news actually gets released. At times, the market can move inside a range of 50-pip, when data gets released. Unfortunately, a 100-pip move can get reversed in just two minutes and get totally negated because of price actions for the whole day. Alternatively, an unusual release can be received calmly, if market chooses to do so.
The reason of this unpredictability is that during news release speculators immediately respond with a hope to gain some pips and exit. A brief ballooning on volumes and spreads get created instantly but greatly distorts the underlying technical depiction.
After these initial speculators buy/sell and exit, the momentum traders join and add fuel to the short term trend. They may succeed but it depends on the timing and market liquidity. All this commotion can reverse or negate the price action.
The main aspects needed in news release trading are gaining timing information, analyzing rapidly and quick access in trade. Vortex Assets is trading company, which has provided new and seasoned traders a MT5 trading platform.