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forex-trading

Be Profitable In Your Trading Using Fundamental Analysis And A Forex Calendar

As a good foreign exchange trader, a Forex calendar ought to be a crucial part of your daily trading routine. Even as a technical analysis trader, as many Forex traders are, you can't forget about the economic news. In truth, seeking the upcoming scheduled news on a Forex calendar should be the very first thing you do prior to choosing enteringa trade. Knowing the timing of high impact news prior to it occurs allows you to reduce your risk. During these volatile market situations, you may decide to stay on the sideline or take advantage of them using fundamental analysis trading techniques. Trading Forex from the perspective of fundamental analysis is not a common option, however, if you combine it with your technical analysis, you might have a tremendous advantage in the Forex market.

Fundamental analysis primarily considers the economic and political changes in the foreign exchange market. It may also provide a better understanding about important economic reports and indicators. Unemployment rates, interest rates, PMIs, and gross domestic products are only a few of the most important economic indicators in the Forex market. Once you understand how these reports can affect a particular currency, you can create a trading technique to take advantage of the volatility in the market. The most favorite ways to trade the news would be to trade the initial spike that follows a high impact news report; specifically if the actual release number differs greatly from the estimate number.

For example, if we're expecting the US Non- Farm payroll news to be released at a forecast of 300K. If the actual release number comes out a lot better than expected at 370K and above, we'd jump in on a trade to buy the US dollar against other currency pairs. However, if the actual release number comes out worse than expected at 230K and below, we will entera trade to sell the US dollar. In this illustration, you will recognize that we are looking for a 70K of deviation. According to historical data from prior NFP releases, this is actually the minimum difference required for the market to move 50 pips or more for at least 75 percent of the time.

There are several well- recognized Forex sites and blogs that offer free economic calendars which can be updated with the latest economic news and figures as soon they are announced. One fantastic source for Forex fundamental analysis is CurrencyNewsTrading. com that provides a great Forex calendar that shows the scheduled news events in a weekly basis. Most online Forex calendars color- code each news event by its potential impact, yet the CNT’s Forex calendar displays only the high impact news that historically are the most tradable. Furthermore, it shows the tradable deviation for each event, together with the potential pips movement range, associated market headlines, plus the different currency charts displaying the market movement as a result of each particular news report.

By using a Forex calendar, you will know in advance the time of news reports that are likely to affect a particular currency, and it should be a vital tool in your daily trading so that you can control your risk. Also you can make use of the market volatility right after these news reports by using fundamental analysis strategies. To begin with, visit CurrencyNewsTrading. com to find out about news trading and to get the newest tools to assist you to make much better choices in the Forex currency trading and hence make you more profitable.


 

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