Forex Traders most often, give too much importance to “news” and to some extent, it will not be wrong to say that news or major events across the world, do have an adverse or positive impact upon financial markets. But then, we ought to lay emphasis upon which event is more crucial or what news is more important from market sentiments point of view?
Understanding What or Why in the Financial Market:
At DicnoFX, it has been our determination that there are certain events which push a currency pair to one direction or the other. Traders search for reasons that make a currency value to slip down and they refer to some website or news site. As such, trying to find answers to such losses and pondering over why and what barely matters, the only crucial thing is that some event has taken place which has diminished currency worth.
What traders need to realize is if trade flow is affected, this clearly shows that they placed themselves on the wrong side of the trading spectrum. To continue to think over the reasons and events behind the currency downfall would completely be time-wasting and irrelevant as that phase has passed by now. In fact, traders are likely to lose great amount by continuing to behave like this.
There are instances of some traders who lose all of their investment during a mega financial crunch, nearly 10 years back and they were always found to be argumentative about fall in the stock market and how soon would it stop and be reversed. But they were destroyed financially owing to that mega stock plunge.
Then, to emphasize upon the point that too much thinking about the market going in one direction is useless, there was a gentleman who was a famous trader who was completely wiped out during 2006, as he tried to exercise the short of USD/JPY pair. He was filled with the belief that money will be wired to Japan as this was a safe pair and safety trade while his argument held reasonable correctness within it. But, as a miscalculation, his shorting began at least 6 months earlier than it should be planned. To make things worse, he continued shorting the USD/JPY pair only to find his account locked and blown up.
Although, his argument did hold water but the reality was marked by the rise of currency pair and it continued to soar during the whole season. In events like this, traders can either predict absolute events or they can register huge profits. It’s all up-to their gut feeling.
Are You not Getting News Quick And Easy?
Now, this is a dissuading aspect. More than a decade ago, there were many people who seek involvement in trading news and rightly so, as, in Forex spectrum globally, people do make use of news as they are announced and base their crucial decision on it. But, those in the trade of algorithm and machines, also made their presence felt in Forex market and they too stepped into news trade. But luckily, as the most notable aspect now, there is an available program now which can scan major news concerning the Forex and can direct trade as per the existing circumstances.
Not only the newsfeed reveals limited insights and is slow to find and fund you while procuring a huge sum of dollars per month. Also, execution is slow too and traders’ account is not big and prominent enough to be able to push the market further.
Please note that we don’t mean that accessing news is futile with market analysis but traders need to adhere to a wider perspective for a long term game. We can cite an example where if there is a regular flow of negative news from Canada in recent times, then traders may develop a perception that the Canadian dollar is on its way to being bearish. They are absolutely correct in their viewpoint although, but this should never mean that one should put the finger on Sell button straightaway. Such a scenario, (discouraging events in Canada) suggest that we need to keep this aspect in our sub-conscious mind as the major aspect that may impact the currency growth or fall.
In such a positive trend, there are news portals which collect and inspect the news while planning long term movement. To anyone among us, it is absolutely impossible to speculate what is going to take place in coming 5 minutes in the global currency market, based upon a headline. The issue may arise out of liquidity and with high-end machines, thousands of trades have been materialized by the time one thinks of pressing the button.
We Ought To Keep It Simple:
Let’s not get into so much deep into currency trading so as to be an economist but let’s be on our main course of action, as a prominent analyst. But one thing is sure that all of us are here to trade in a comfortable and reliable manner and to earn huge profit sum. We all like to earn profit and then the sources of news gathering are so much vast that news analysis and final take differs at length between one source to another and from one person to another. Traders should always look for easily understandable news and events analysis and reliable news source who and which can also guide and goad them to do trade in a positive way with profits assured.
The news and analysis should be such that the imminent event should be predicted what is about to happen and what implications would it have on Forex Market but traders are, perhaps not equipped with tech to resolve what event would push the markets in what and how many directions.
It is not always possible to gather all-round info and data and to analyse it in a bid to predict whether a currency pair would go to some particular direction and there are scores of factors and reasons behind this trend compelling traders to go on a long trip or short trip in any of the ways. If, however, resistance is managed and destroyed, this event is suggestive that we would go higher. Conversely, if support is broken, this will lead us down. Now, its all up to traders, if they bother for this and want to know the reason or would they market their trade and would like to earn profits.
While looking for insights and useful news about Forex trading or Investing Forex as well as for other crucial guidance about what is Forex trading and how does it work…Please rely upon our versatile prowess in the field and we shall spell a great success for you against your investment.