How to Use Forex Trading News and Reviews To Your Advantage?
Economic news and reviews are important aspects of Forex trading. A sudden shift in central bank sentiment can send a currency pair soaring indefinitely while onset of geopolitical turmoil between countries can severely deteriorate a currency’s value over time. Keeping up-to-date on Forex news and reviews can significantly increase your profitability in the long run.
Although it can act as a tool to give you an edge over the market, using Forex trading news and reviews irresponsibly can also act as a double-edged sword that can expose your capital to too much risk. Here are tips on how you can use it to your advantage as a Forex trader.
Establish Your News Sources
Since Forex trading became a trend in the financial industry, more and more websites and blogs popped up to disseminate the latest information about it. Yet keep in mind that not all portals convey accurate information. Some sites merely want to attract clicks and get paid through advertisements. Avoid misinformation by limiting your news search on established websites like CNBC, Forbes, and Yahoo Finance.
You can also look for upcoming economic news from dedicated websites. They update their data feeds regularly and even lay out future economic reports and press releases alongside respective forecasts and historical results. They even offer educational material that teaches new traders how to manage positions during volatile times.
Stay in the Sidelines During High-impact News
For some traders, trading news-derived price action seems like a fast way to make a lot of money. Many pairs tend to move to extreme heights during high-impact news, such as interest rate announcements, unemployment rates, and monetary policy changes. It’s not impossible to see a 50 to 100 pip move upon the release of these reports.
For the small-time, retail traders, however, which account for less than 20 percent of the trillion-dollar Forex market, these volatile times can do more harm than good to your capital. Hedge funds and banks that have greater capital to invest can simply drag your positions to whichever direction they want, irrespective of the news outcome.
Instead, wait out the first 15 minutes following the news release. This lets you avoid the risk associated with the short-term volatility. Depending on the news outcome and the ensuing price action, you can either follow the current bar’s direction or fade it.
Be Crucial When it Comes to Reviews
Reviews related to Forex trading should be taken with a pinch of salt. Forex trading systems, for example, may have seemingly trustworthy testimonials and positive user reviews.
Accurate Forex trading news and reviews can be hard to come by online and even when talking in-person with colleagues. Nonetheless, they can give you new trade ideas, strategies, and tools that collectively give you an edge over the market.
Take the time to peruse through trading news and reviews. Avoid hastily making decisions solely based on the information you gather from news sources and review websites. Try to combine these data sources with firsthand trading experience and gut instinct developed over time.