News releases forex trading
This site is dedicated to Forex trading strategies and the first one we would like to speak about is not exactly forex trading strategy but a very important direction and choice for forex trading. In this article we will talk about news releases forex trading.
Well, news releases forex trading might be a very profitable business, but it is not for a weak heart traders! Why? Because speculating on the direction of a chosen currency pair, during the economic, high impact news release can be very dangerous and stressful. Obviously it’s possible to wait for the storm to pass and then to attempt to capitalize on the real market movement, after all the speculators took their profits or burned their account. The purpose of the forex trading strategies which are based on news release is capturing the rational movement of the market, after the irrational volatility, which means entering the market a few minutes after the news release.
There are several extremely important economic news released during a month, let’s review the most important news release in the forex market:
NFP – Non Farm Payroll: The release of NFP generally occurs on the first Friday of each month at 8:30 a.m. EST. This causes a great volatility in the markets and therefore provides a guarantee action and many trading opportunities.
Advance Retail Sales: is a monthly measure of sales of goods to consumers at retail outlets. This figure is insight into a consumer confidence and demand.
Business inventories: A figure that can show economic turning points. A data release about unsold goods of the manufacturers, wholesalers and retailers. A significant decrease in inventories implies that the economy is on the verge of rapid growth because stockrooms for businesses are empty and need to be replenished, which triggers higher production overall.
Building permits: Because the receiving of the building permit is a first step in the construction process, the figure is used as the earliest indicator in the housing market.
Current account balance – US: Summarizes the flow of goods, services, income and transfer payments into and out of the US. The report acts as a line-item record of how the US economy interacts with the world economy.
Of course there are many other high impact news releases, released all over the world, but these five are very famous high volatility providers. These releases must be taken under consideration, no matter what trading strategy you follow.