Whether you are a newcomer to the world of trading foreign currency pairs or a veteran, your performance in the forex market will always be enhanced if you are aware of current and pending financial events in the marketplace.
A common error for beginners is to take what appears to be a good position in your favorite currency pairing, only to have the market make a sudden move against you due to an economic announcement by some government authority.
Being blindsided is never anyone’s idea of fun, but it can be prevented by a daily routine of reviewing the financial press and your broker’s calendar of pending economic announcements before placing your first trade of the day. Forex market live news streams can be used to monitor the forex market and help traders make informed decisions.
These websites provide the latest quotes and historical charts on major and minor pairings, along with a wealth of other data and links to informative news articles. Some of these sites may also provide their form of a unique event calendar designed to advise of what events during the day might seriously impact the direction of market behavior.
Fundamental versus technical information
Buying and selling in the forex market has gained greatly in popularity over the past decade. Your type of trading activity determines how much you depend upon technical or fundamental information to succeed. Day traders and scalpers open and close positions quickly, depending upon technical charts and indicators, thereby minimizing the potential of being blindsided.
The majority of traders, however, prefer to hold positions for days, weeks, and even months at a time. Known as swing or position trading, these traders depend heavily on changeable fundamental factors. These may include changes in the economy, interest rates, inflation, monetary policy, geopolitics, natural disasters, and more.
What type of fundamental information should you be looking for?
It can be easy to invest hours into reading market-moving news and staying abreast of when government agencies are scheduled to release key information, but an individual retail forex trader can only glean so much from this exercise. Banks and financial institutions invest millions in their research staff, who will always know more than a single trader could ever hope to know. Whatever information is in the public sphere will have already been acted upon.
Trend-following strategies tend to be the most popular ones in use today. If a particular currency pair is trending in one direction, it is advisable for a trader to seek out current news articles, which offer insights as to how strong the prevailing trend is or what could cause it to change direction. It is important to determine which economic announcements could impact either currency’s behavior and then decide if the timing is right for you to take a position.
It is imperative that a forex trader be aware of scheduled economic announcements or of any news that may directly affect market conditions for currency pairs of interest. There are several sources for this information on the internet, as well as for detailed calendars of scheduled announcements.
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