Forex Data Release- Three Things You Must Understand
Forex trading involves a substantial risk. The reason for such a strong belief is the leverage. Along with the huge potential profits; leverage also increases the chances of huge losses. Many factors move the whole currency market. It is advisable that you as a trader know these factors well. Forex data release is one such movers of forex market.
High Risk Play
The volatility during the news release is mostly at the peak. A hundred pips move in few seconds is not uncommon. Though it is an opportunity to make big bets, it is also equally risky. The stops could be missed due to high volatility forcing you to manually close the trade. Inexperienced traders can stay out of the market. This way you will save a lot of mental distraught. You should trade forex data release on paper till you get familiar.
Macroeconomic Impact
The price of financial assets change in accordance with the perception of the market to certain events. For stocks it could be anything from macro level announcement to the micro level announcement by the company. In contrast the currency market moves mainly in response to macroeconomic factors. The performance of the country will influence the movement in currency of that currency. Forex data release from Japan will move the Japanese Yen. Euro is the common currency for many European countries. So if any data is coming out of European countries, it will have an impact on the price of Euro.
Subdued Reaction to News
There will be times when market will not react violently to the news. Not much of huge moves will be seen at times. This probably happens when the expected data release has already been discounted in the price. If you check the data calendar, you will find that along with the time, you also get the expected value of the data. If market has already factored in the value of the expected data and the data is indeed in line with the expectation you will often find the muted reaction from the markets. You will often see huge moves during major forex data releases like interest rate decision, non farm payroll etc. If you don't have much experience, you should not trade during such times.
Apart from above mentioned data releases, other important data releases are consumer price index, consumer confidence index, GDP, trade balances etc. You should keep your eye on the data release from countries like US, England, Germany, France, Switzerland, Japan, Australia, Canada etc. Many websites have up to date information on the forex data release. A lot of money can be made from trading during the data release within a short span of time. But you will have to know how to interpret the market before and after the data release quickly. If you are not familiar with such volatility you can shut your computer and go out to play golf. Many of the trading miseries could have been avoided by doing nothing. Take extreme caution while you trade.
Forex trading involves a substantial risk. The reason for such a strong belief is the leverage. Along with the huge potential profits; leverage also increases the chances of huge losses. Many factors move the whole currency market. It is advisable that you as a trader know these factors well. Forex data release is one such movers of forex market.
High Risk Play
The volatility during the news release is mostly at the peak. A hundred pips move in few seconds is not uncommon. Though it is an opportunity to make big bets, it is also equally risky. The stops could be missed due to high volatility forcing you to manually close the trade. Inexperienced traders can stay out of the market. This way you will save a lot of mental distraught. You should trade forex data release on paper till you get familiar.
Macroeconomic Impact
The price of financial assets change in accordance with the perception of the market to certain events. For stocks it could be anything from macro level announcement to the micro level announcement by the company. In contrast the currency market moves mainly in response to macroeconomic factors. The performance of the country will influence the movement in currency of that currency. Forex data release from Japan will move the Japanese Yen. Euro is the common currency for many European countries. So if any data is coming out of European countries, it will have an impact on the price of Euro.
Subdued Reaction to News
There will be times when market will not react violently to the news. Not much of huge moves will be seen at times. This probably happens when the expected data release has already been discounted in the price. If you check the data calendar, you will find that along with the time, you also get the expected value of the data. If market has already factored in the value of the expected data and the data is indeed in line with the expectation you will often find the muted reaction from the markets. You will often see huge moves during major forex data releases like interest rate decision, non farm payroll etc. If you don't have much experience, you should not trade during such times.
Apart from above mentioned data releases, other important data releases are consumer price index, consumer confidence index, GDP, trade balances etc. You should keep your eye on the data release from countries like US, England, Germany, France, Switzerland, Japan, Australia, Canada etc. Many websites have up to date information on the forex data release. A lot of money can be made from trading during the data release within a short span of time. But you will have to know how to interpret the market before and after the data release quickly. If you are not familiar with such volatility you can shut your computer and go out to play golf. Many of the trading miseries could have been avoided by doing nothing. Take extreme caution while you trade.
About the Author:
The currency market trading is prone to movements brought on by the release of economic news. You have to do the research and stay on top of economic news and you might harvest the gains. Visit best forex trading system to determine the top forex trading system. Go to Dukascopy forex broker which isable to maintain decent spread even during news releases.
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