Important Forex News Every Trader Should Know
News factors are the most powerful price driving element in the financial market. The price of currency pairs, stocks, commodities, etc. reacts to the news very violently. A volatile market is nothing but the result of such high impact news. Sadly, the rookies in the United Kingdom don’t want to keep themselves updated about the news data as they think it increases the complexities. But not having skills in fundamental analysis is like driving a car without knowing how to stop it in an emergency. So, you are always in great danger if the risk management skills are not determined properly. For that, you have to consider the news data.
The economic news is always scheduled in the global market. By knowing its time, you can scale up the trade. Today, we are going to discuss important Forex news you must understand.
Interest rate change
The interest rate decision tells a lot about the economy. If the country is doing well, everyone has money in their pocket. People will love to spend more money on luxury products. In such a situation, to control the cash flow, the central bank cuts the interest rate. Let’s say FED has cut the interest rate based on 25 points. Right after that news, the U.S dollar index will start rallying higher. On the other hand, if they cut the interest rate it means the country is not doing so well. The banks are willing to give money to normal people with fewer interest rates so that they can expand their business. Such a stimulus program is done to ensure the growth of the economy.
In the online trading industry, interest rate change decision can even change the trend. You have to be careful about the rate change decision since you might be able to save yourself from the major reversal. Those who are thinking about learning about the interest rate change decision is a very complicated task, are making a big mistake. Just stick to the demo account for a few months and you will know how it affects the Forex market.
NFP data
NFP data is major news that shows how much job has been added to the U.S economy. Since most of the major currency pairs has U.S dollar in it, the traders are advised to trade after analyzing this major news. Some of you might say NFP data is released with other news data. So, how will you measure the impact of the NFP as all the data are high impact? For that, you have to understand the average hourly income and CPI. If the average hourly income increases the CPI, often known as Consumer Price Index also increases. This is the reflection of the stable performance in the U.S economy.
Before you try to trade with such data, you have to use a demo account and see the reaction of the market. The demo account is the best way to learn trading without risking too much money. So, stick to the trading process and trade the market with proper discipline. Never break the rules as it results in big losses.
Press conference
This is one of the most dangerous types of news for retail Forex traders. A press conference makes the market extremely volatile and the traders find it very hard to stay in the game. Being a novice trader in the United Kingdom, you should not try to take any trade on such an event. Try to keep yourself tuned with the economic announcement so that you can scale the trade before such major news. Once you become good at analyzing the data associated with the press conference, you won’t have to think about the wild spikes. Safety should be your prime concern because it determines your success in trading.
