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The Forex Room: News Trading For Investors

For quite a few Forex room investors, trades are dictated by indicators and price indices that are technical in nature. Several hours are spent on a consistent basis to research all identifiable indicators and every risk is taken into account; decisions are then made based on all data that has been studied. If you know anything about news trading, however, you would know that none of the research and due diligence is done before a move is made there isnt any time. The only thing that is really taken into account is a countrys economic news announcements.

There are eight major currencies that are traded in the Forex market, along with almost 20 derivatives as well. These are the US dollar, the British pound, the Euro, the Japanese Yen, the Australian dollar, the Swiss Franc, the Canadian dollar and the New Zealand dollar. Because of the availability of each currency, currency pairs, and its derivatives, each currency can be traded at any given time because they are globally traded.

News trading is split second decision trading of foreign currency right before or after a major announcement is released regarding a countrys economy. Major announcements in regards to a countrys economy can raise or lower its currency value in an instant. The trick is to invest or pull out of the currency in a split second in order to make thousands of dollars or try to avoid losing thousands. This risky kind of trading is possible because the Forex market never closes. With financial markets, trades are suspended while important company announcements are made. Usually these big economy announcements are made after the closing of regular markets for the day, but since the Forex market is open all the time, any such announcement is going to have immediate effects on currencies.

In order to be successful with trading in the foreign exchange market, investors have to have the latest and up to the minute news announcements always at their disposal. Even when announcements are just a few minutes old, it can have terrible effects for a trader with any sum of money at risk. Traders have to keep an eye out for any news regarding any countrys economy. News that has the biggest impacts on currencies include interest rate changes, FOMC rate decisions, retail sales figures, inflation indicators such as the consumer price index (CPI), producer price index (PPI), unemployment figures, industrial production announcements, boost in business and consumer confidence, as well as business sentiment surveys. Manufacturing sector surveys, trade balance release details, and foreign purchases of U.S. Treasuries may also prove useful for a news trader in Forex rooms to better make decisions regarding when or when not to trade.

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