In this era where information is definitely an extremely powerful and strategic asset, whether to individuals or corporations, and information equals money, especially for a trader, shutting yourself faraway from news could be suicidal. Forex is incredibly sensitive to the flow of news that’s linked to it, and major short-term currency moves are almost always preceded by changes in fundamental views influenced by the news Lambert Philipp Heinrich Kindt. Traders all over the world make a living by processing and translating information into money. Financial news services providers understand how important news is 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 trading from any news service provider on the average trading day.
Traders, especially those who day trade forex, require the most recent up-to-the-second news updates so as to facilitate their trading decisions which have to be produced at lightning speed. They mostly make 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 essential to traders, many choose these online instant news services rather than depending on daily newspapers just like the Wall Street Journal or the Financial Times which carry stale news that’s of little use to traders.
The main reason why news is so important to Forex trading is that each new little bit of information can potentially 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 tend to act on these changed perceptions through buying or selling actions in forex. In line with the news, these traders will undoubtedly be preparing to cover their existing positions or even to initiate new positions. A trader?s action is founded on the expectation that there will be a follow-through in prices when other traders see and interpret exactly the same news similarly that he or she has, and adopt exactly the same directional bias because the trader consequently.
News is a very important catalyst of short-term price movements due to expected impact it has on other market players, and this is in ways an anticipatory reaction on the part of the trader as she or he assumes that other traders will be affected by the news as well.
If the news happens to be bullish, say for the US dollar, traders who react the fastest will undoubtedly be among the first to get the united states dollar, followed soon by other traders who may react slower to the news headlines or are looking forward to certain technical criteria to be met before jumping onto the bandwagon. And you will have those who join in the buying frenzy at a later stage when 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 holds true for bearish news, traders will sell since they know that others will be selling, thus pushing the USD exchange rate down. That is using the assumption that since other traders will be getting the same bits of news, they will be also are generally affected exactly the same way.
Publicly released news is disseminated to the many newswires. Any trader with usage of these wires can utilize the information given out, and react accordingly in forex. However, institutional players do get information that retail traders don?t, as they get privy usage of order book information within their computer systems, and may also know something that others don?t through their personal contacts in the market.
In the wonderful world of Forex trading, there are no rules or restrictions against insider trading! Anyone who possesses information that is known and then a select few can and do trade that information in the forex market. Sometimes, such news may give an unfair advantage to these institutional players, but at other times, this isolated news access may not result in real market action if other players don’t have that information.
Your voice is one of the most powerful tools you own and utilizing the media is a superb way to get your voice heard. The most profitable and often overlooked free publicity generator is the news release. Guts is really a brief written summary alerting the neighborhood media about your organization news and activities. News releases aren’t only great marketing tools but also a lot more credible and believable than advertising given that they appear to come from an objective third party.