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Monday, July 9, 2012

My 3 top Forex news releases

I have written a lot about importance of Forex news in day trading. These events give us day traders a lot of opportunities to make a lot of pips quite fast. Of course, news trading is pretty risky and requires a lot of patience, practice, experience, very strict money management rules and ability to make decisions fast when things go not as we have planned. In the article I want to single out those Forex news releases that are my favorite. 

First of all, I want to say what criteria I have for news releases to trade them. If you look at the schedule of those events and then look at market reactions to them, both before the release and after the release you will quickly notice that some events have very low importance, some have medium importance and yet others have very high importance. The latter are in my area of interest. 

Big movements in securities are necessary for money to be made on these news releases. These are not often, but when they happen you are rewarded for your patience and discipline. 

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So, which news are top? The answer may differ a bit, but for me they are as follows:

1. Non Farm payrolls. The release has been quite a sensitive area for most traders as the state of US jobs are one of the main ways to see the state of the economy of the strongest country in the world. This event causes a lot of volatility in all markets, not only Foreign Exchange. I still remember times when the news would cause currency pairs move hundreds of pips in a matter of a second. This has changed, but from time to time history repeats itself. Be aware of that!

2. Interest rate decisions from central banks. These may not always have immediate reactions, but reactions will be in a matter of a few days. There might be a few decisions the same week or even day, so it is better to wait till all of them are announced and only then place trades. Markets often become less active before the announcements and volatility increases in the first hours after the release or in the next two days. When this news is announced around important support or resistance levels you might catch a nice reversal and make a swing trade that might allow you to get 1000 pips or even more. 

3. GDP from around the world also is an event that will have strong impact on the markets medium term. Again, the reaction may not me immediate, but as the market digests the data that is releases it will eventually move one direction or another. You will simply have to go with the flow.

I hope you will take time to watch what happens when these news events happen and learn from the experience. Hope the post was useful and interesting too. 

For more on the topic of Forex news read:

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.