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As a frequent trader on the foreign exchange market, it is highly likely that you are drawn towards common currency pairs. If this is the case then it can work in your favor to follow forex trading news as this will enable you to keep up with the economic, political and social releases that represent those currencies (or countries), and execute your currency trading in accordance with those figures.
Forex trading news is released at least seven times a day, five days a week. Such coverage predominantly focuses on the eight major currencies or countries that are closely followed and is released at regular intervals throughout a given day.
The eight major currencies are:
- US dollar (USD)
- Euro (EUR)
- Japanese Yen (JPY)
- British pound (GBP)
- Swiss franc (CHF)
- Canadian dollar (CAD)
- Australian dollar (AUD)
- New Zealand dollar (NZD)
Why follow forex trading news?
Forex trading news allows you to keep a close eye on the latest economic goings-on across the globe. Economic data, or forex trading news, appears to hold significant influence over short-term movements in the forex market as it can have a particular impact on currency fluctuations. Even minor economic data can have a temporary impact on a particular currency pair. If you are able to closely follow forex market news, it can work strongly in your favor during your forex trading.
Key factors to bear in mind when trading news
- Learn when news is going to be released at a given time
- Understand how that news affects the markets
- Acknowledge the significant trading news from the less significant
- Thoroughly learn how to trade when processing forex trading news
- Stay up to date with economic news
Disadvantages
Forex trading news can have an incredibly volatile and unexpected impact on currency movements. For example, what may have been predicted can often be far from the truth, resulting in sporadic currency movements that are completely unanticipated, thus throwing off many traders and resulting in major losses.
In addition, some economic releases are less significant than others, depending on which country releases those figures and the significance of those figures in relation to other data released at the same time.
Conclusion
It is therefore advisable to treat market news with absolute caution. If approached incorrectly or with ignorance, trading forex news can also be detrimental to your trading success.
