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 off from news could be suicidal. The forex market is incredibly 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 know how important news would be to the forex market 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 company on the average trading day.
Traders, especially those who day trade the forex market, require the most recent up-to-the-second news updates in order to facilitate their trading decisions that have to be produced 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 the computer monitors. Because 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 is of little use to traders.
Exactly why news is so important to Forex trading is that all new little bit of information could 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 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 undoubtedly be getting ready to cover their existing positions or even to initiate new positions. Paralyzed ?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 in a similar way that he / she has, and adopt exactly the same directional bias as the trader consequently.
News is a very important catalyst of short-term price movements due to the expected impact it has on other market players, which is in a way an anticipatory reaction for the trader as he or she assumes that other traders will undoubtedly be affected by the news as well.
If the news is actually bullish, say for the US dollar, traders who react the fastest will be among the first to buy the us dollar, followed soon by other traders who may react slower to the news headlines or are waiting for certain technical criteria to be met before jumping onto the bandwagon. And you will have those who interact the buying frenzy at a later stage if they get hold of the delayed news each morning newspapers or from their brokers. This progressive entry folks dollar bulls over a period of time 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 tend to be affected the same way.
Publicly released news is disseminated to the many newswires. Any trader with access to these wires can utilize the information given out, and react accordingly in the forex market. However, Surefire 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’s 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 don’t have that information.
Your voice is probably the most powerful tools you own and using the media is a fantastic 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 local media about your business news and activities. News releases aren’t only great marketing tools but also far more credible and believable than advertising since they appear to come from an objective third party.