Forex News Utilization

[menotforgotten]

How can I use the news to watch for fluctuation in currency? I look at the forex app on my iphone and I have a hard time reading it to understand whether or not the currency it is talking about is going to rise or fall.


I am new to the forum, great information to be found here.

 

[Enivid]

An obvious way would be to go long currency on good news from its country and go short on bad news but in reality it is quite more complicated.

Good news from some regions tend to decrease global risk-aversion, which leads to growth of the currencies with higher interest rate yield and drop in the currencies with lower interest rate yields. The vice versa is also correct.

A safer way to trade news would be to use pending orders set to both directions - short and long - in order to capture market volatility. Of course, it can work only if your broker does not widen the spread on news or does not have crazy slippage on pending orders.

 

[Fxpipper]

That's a good question unfortunately there's no easy answer to that one. Bottom line, if the economy of a certain country is not performing to the mark, it is going to weaken and the opposite will hold true if it is doing well, Yen is the perfect example for this.
But do note, there are other factors you will have to take into account. I would suggest that you review some of the free online resources, review the info on trading by fundamentals and technicals, and decide what you want to do..good luck!

 

[sashoy]

My opinion is that USD will strength now till the elections. A lot of money are pumped in the economy and after the elections we can expect huge drop. Anyway, I`m newbie and maybe I don`t understand the things well.

 

[Fxpipper]

Sorry, but it is really not as simple as that. Granted, the elections will have an impact on UDS but that needs to be taken into account with other fundamental news feeds, like fed announcements, etc.

 

[Rob Taylor]

Trading news is a very high risk strategy. My advice would be don't do it.

 

[Fxpipper]

I would have to agree, since no one can predict on how the markets will react to the news, esp if it happens to be vague rather than specific. One example would be a recent fed announcement on rates and the other, would have to do with eurozone setting up a governing body for its banks in view of the current crisis..