The Basics of Forex and Forex news is essentially economic variables that can be considered as catalysts of price movement in the Forex markets. The school of thought known as "fundamental analysis of Forex" basically says that a trader can predict the future price movement of a market based on fundamental market data or news. While it seems logical to assume that can be studied economic fundamentals and market news and make predictions about its future direction based on these data, it is not so simple.
Have you heard the old saying "Buy the rumor, sell the fact"? There is a reason why this saying has been on Wall Street for hundreds of years, it is because when they leave market data, usually already been taken into account in the market and its impact will be minimal once it finally launches. Traders and investors tend to operate according to the expectations of what might happen in the future, based on some data news or fundamental analysis, that's where part of "buy the rumor" comes in. The tricky aspect of this is that we can never know for sure what part of the upcoming economic news have already been addressed or taken into account in the market versus what really happens when these data are published. For these and other reasons,Forex and analysis critical in general.
The price action reflects all the variables that affect a market
Perhaps most important thing to take away from this lesson is that the action of the gross price of a market is a direct reflection of each variable that caused the market to move. In fact, a daily bar chart daily price is the final result of all the thousands of day economic variables that influenced the market. There are literally thousands of variables that can make any market moves a given day, but the fact that these fundamentals and news variables are the catalysts of price movement in one market does not necessarily mean that try to analyze them useful or relevant . for Forex traders short to medium term.
Most times, when a big event of economic news coming as a policy meeting of the FOMC or non-farm payrolls, traders and investors are already speculating about what will be the result for weeks or months before it actually happens, and the end result is that the actual event itself is already included in the market when it occurs, so it really is not an event. Usually, there will be increased market volatility during these major news events, but focus on graphics frames higher as time intraday volatility this is not really anything to worry me. If there is a strong daily trend charts, I'm much more concerned with that, and I'll use any delay counter trend occurring as a result of the news for signs of action precio.en line with the trend of the daily chart; This is the essence of how 'trade news', so to speak.
In the table below, we can see a daily chart of GBPUSD and on 18 December the market grew faster shortly after the announcement of the FOMC meeting. Now, the important point to consider here is that traders and investors had been discussing the potential of this announcement during the previous weeks to him, and that the GBPUSD was already up long before this. The announcement itself was actually a positive for the US dollar as the Fed announced it was reducing its bond buying program, but what happened? The trend continued as usual. The point is that you can not stop a freight train ... there are very strong reasons why the market trend, and one news event is very unlikely to change the course of the trend. A) Yes,
How important economic news?
In trying to analyze all the variables of economic news affecting a market every day, you will probably be stressed, guess their sense of commercial "instinct" and generally cause confusion and frustration where it is not needed there. Many traders believe that all economic data circulating every day in your favorite financial news channel or Internet are important, after all, if so many "experts" are talking about these news events, should be important right? Not so fast. Financial news industry is a big industry that employs thousands of people, but most real economic data is useful or relevant to you as a trader, it's a very different story.
As discussed in the previous section, the price action in a market actually gives you all the information you need to know about that market. News reports and fundamentals are absorbed by the market and reflected through its share price, so you can stop actually read economic reports and hear the views of experts market expert ... just do not matter. If you want to start learning how to interpret and use the gross price action in the market, see my current trading price action for more information.
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