Jul 21 2009
Learn
forex scalping.There are no rules or restrictions against insider trading in the world of forex trading. Anyone who possesses information that is known only to a select few can and do trade that information in the forex market. First trade on your
forex demo account.
Publicly released news is disseminated to the various newswires. Any trader who has access to these newswire services can tap into that information and react accordingly in the forex market. You should develop your own
forex trading system.
However, you must know that the institutional players do get information that retail traders don’t have. Institutional players have access to the order book of their clients. They know the location of their market orders. They may also know something that others don’t through their contacts in the industry.
At times, this isolated news access may not translate into real market action if other players don’t have that information. However, sometimes the news may give an unfair advantage to the institutional players.
In other words, forex market is dependent on news. There will be negligible or little price movements in the market if there is no news. You can say the currencies move based on the technicals. Even then, these technicals have been established previously by news or expectation of future news.
The market reaction to the news is specific as it depends on both the type of medium that the news is transmitted on and the type of news that is being released. The market reaction to the news is staggered.
The online news service relay the information to the computer monitors of the traders at almost the same time as the market event occurs with very slight delay. Most active traders get their information from these online market news services.
However, there are many other less active traders who feel they don’t need real time news so they don’t subscribe to these online news services. They rely on market commentaries written by analysts and published on websites or in newspapers. The market reaction can thus be staggered.
Market reaction may be immediate within the first few second from those who receive real time news to a more delayed reaction from those who obtain the same news hours or even days later.
Forex economic calendar is usually packed with an average of twenty economic news releases per trading day. The market reacts differently to different news. Some news may produce little or no reaction at all.
During times of scheduled news releases, currency prices adjust very rapidly to the released data. You have to be selective to what news to focus on as the market reacts to a varying degree in relation to the type of news that is released.
Forex market reacts to what of the news rather than the why. For example, the currency prices will move as the market reacts to the better than expected unemployment figures. The market will not have time to consider why the unemployment figures are better this month as compared to the last month. Trading is all about taking advantage of what of the news. If you are more concerned about the why of the news rather than what of the news than you should stop trading and become an analyst.
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