It's not enough to just know the technical analysis when trading. It is equally important to know what makes the forex market move.There is a fundamental force behind these movements. This force is called the news! The fact is that the news affects the way we perceive and act on our trading decisions. It is no different when it comes to trading currencies.There is, however, a clear difference in how you handle the news in the stock market and foreign exchange market.
When the news came out, especially important news that everyone is looking, you can almost expect to see some great moves. Your goal as a Forex Trader is to be on the right side of the move, but the fact that you know the market will probably move somewhere makes the opportunity definitely worth a look.As with any trading strategy, there are always potential hazards should be aware of.Here are some of these risks:
-Because the Forex market is very unstable during important events news, many dealers spread expansion in this period. This increases the cost of trade and could hurt its bottom line.
-You can also experience slippage.Slippage occurs when you want to enter the market at a certain price, but due to the extreme volatility in the course of these events, you actually appointed on far different price.Big market moves news events often do not move in one direction. Often times the market can start flying in one direction, only to return vhipsaved in another direction. Trying to find the right way can sometimes be a headache!

Before you even look at strategies to trade the news event, we need to look at that more news events worth trading.Do not forget that we are trading the news because of its ability to increase instability in the short term, so of course we want to only trade the news that has the best foreign exchange market moving potential.While the market react to most economic news from various countries, most drivers and most watched news coming from the US.The reason is that the US has the largest economy in the world, and the US dollar is the reserve currency of the world. This means that the US dollar is a participant in about 90% of all foreign exchange transactions, which makes us the news and information important to watch.With that said, let's look at some of the most unstable news for the US



In addition to the inflation report and interview the central bank, should pay attention to the geo-political news, such as war, natural disasters, political unrest and elections. Although they may not have as big an impact as the meantime, it is still worth paying attention to them.Also, keep an eye on moves in the stock market. There are moments where the mood in the capital markets will be a precursor to big moves in the currency market.
Because of the news may bring instability in the foreign exchange market (and more trading opportunities), it is important to trade currencies that are liquid. The liquid currency pairs us confidence that our orders will be carried out smoothly and without any "hiccups".

1. EUR / USD
2. GBP / USD
3. USD / JPY
4. USD / CHF
5. USD / CAD
6. AUD / USD

Did you notice anything? These are all major currency pairs! Remember, because they have the highest liquidity, Majors couples usually have the narrowest spreads. Since spreads widen when news reports come out, it makes sense to hold with those couples who have closely wider begin with.
There are two basic ways to trade the news:a) Have a directional biasb) Have a non-directional bias

Given the direction of bias means that you expect the market to move a certain direction one news report was published. When looking for the opportunity to trade in a certain direction, it's good to know what is news reports that will cause the market to move.
A few days or even weeks before News Report comes out, there are analysts who will come with some kind of predictions about what will be released numbers. As discussed in the previous time, the number will vary between different analysts, but generally will be shared number that most of them agree on. This number is called consensus.When the news report was published, a number that is given is called a real number.

"Buy the rumor, sell on the news."This is a common phrase used in the foreign exchange market, because often times it seems that when the news report was published, the movement does not correspond to what the report would lead you to believe.For example, let's say that the unemployment rate in the US is expected to increase. Imagine that last month the unemployment rate was 8.8% and the consensus for this upcoming report is 9.0%.With consensus at 9.0%, this means that all the big players in the market expecting a weaker US economy, and as a result, a weaker US dollar.So, with this expectation, the big players in the market will not wait until the report is actually released to start acting on taking a position. They will go forward and start selling their dollars for other currencies before the actual number released.As a retail trader, you see this and think, "Okay, that's bad news for the United States is the time to short dollars!"However, when you go to your trading platform to start selling the dollar, you can see that the markets are not moving in the direction you thought it would. It is actually moving up!
This is because the big players have already adjusted their positions before the time News Report even came out and can now take profits after the run up to the news event.Now we will again this example, but this time, imagine that the actual report published unemployment rate of 8.0%. Players market thought the unemployment rate would rise to 9.0% due to the consensus, but the report showed that the rate of decrease, shows the strength of the dollar.What you will see on their lists will be a big rally the dollar across the board, because the big market players did not expect this to happen. Now the report was published, and it says something completely different from what we expected, everyone was trying to adjust their positions as quickly as possible.This would also happen if the actual report published unemployment rate of 10.0%. The only difference would be that instead of dollars gathering, he will dismiss as a rock!Since the market consensus was 9.0%, but the actual report showed a larger 10.0% unemployment rate, the big players would sell more of their dollars, because the United States seems to be much weaker than when they were first published forecasts.It is important to follow the market consensus and real numbers, you can better measure of that news reports will actually cause the market to move and in which direction.More common strategy Data Trading News is not bias access routes. This method ignores the directional bias and just play on the fact that the big news report created a great move. It does not matter how the Forex market moves. We just want to be there when it comes!This means that when the market moves in either direction, you have a plan in place to enter that market. You do not have a prejudice as to whether the price will go up or down, hence the name, not bias directions.

SUMMARY OF TRADING IN THE NEWS:- When you have directed bias, expect the price to move a certain direction, and you have your orders in already.- It's always good to understand the underlying reasons why the market is moving in a certain direction, when the news was published.- When you have a non-directional bias, I do not care which way the head price. I just want to trigger.- Setups for non-directional bias is also called straddle trade.
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