Trading the News is great for catching short term volatility. The news which is most able to move the markets come form the largest economies, in particular The USA and The Euro Zone. The US dollar is the worlds reserve currency and 90% of forex pairing volume involves the USD, so it stands that US economic data is very important. In addition to economic data we should also pay attention to geo-political events, like wars, coups, natural disasters and elections, to name but a few.
Stock markets, Forex, bond markets, etc. can be moved too by 'news'. For instance retail sales releases will break sales down by sector, so if you own a retail stock in the food and beverage sector these break-downs can move the stock or market.
Top Economic News to Trade
Below I've listed some of the best economic releases to trade and what they mean to the trader.
Which Currency Pairs are best to Trade the News
Because news increases volatility it's best to trade the most liquid pairings. The most liquid pairing all include The USD. They are:
EUR/USD . GBP/USD . USD/JPY . USD/CHF . USD/CAD . AUD/USD
The above parings also have the tightest spreads, so reducing your trading costs.
To Sum Up
We've highlighted the top 10 or 11 economic releases to trade in the chart above. There are other however and as always you should do your own research on how economic news moves your market. Markets move differently depending on the economic environment you find yourself in and they'll move differently depending on other countries reports. There's usually inter-market correlation that needs to be factored in. Do your homework, stay abreast of all releases from all over the world and work through the meaning methodically. It's a good idea to study how releases move markets for a couple of month prior to trading.
Technical analysis is not an exact science and although these ideas can increase the probability of making the correct trade, many will go against you and large losses can be incurred. Your own trading strategy needs to be formed and hopefully you'll be on your way to achieving this on completion of this course. <<<<<<< HEAD