Forex movement has proven to be moving fast. Forex trading offers many opportunities to earn huge profits on short-term trading because forex trading is also dependent on price fluctuations lasting only a few minutes.
What should you look for? And how should you react?
The currency market is highly reactive to economic announcements, for example: after the announcement in September that the Federal Reserve will not do tapering off on its quantitative easing program, making the dollar falls dramatically. This signal tells the US economy remains under must have the support and send traders to transact into stronger currencies such as the GBP which caused a sharp breakout in the GBP / USD.
Such fluctuations are based on the news that is unusual since most economic data announcement has the effect of lower, but it will always have an effect as well as provide opportunities for profit at the right time (see schedule of economic news – updates).
Usually there are seven or more economic announcements on one day of trading major currencies. For a part-time trader, it is important to know where the economic data to be aware so that they can choose the currency to be traded.
The economic announcements coming from the United States because most trading currencies pegged to the dollar. In addition, the announcement of the British economy which has the effect is almost as important for Forex trading also took place in London.
After the announcement, usually currency will fluctuate at random at first 60-120 seconds before moving sharper.
This trend will become apparent over a period relatively longer with the effects of market announcement took place between two to four days, but there will be a lot of movement up and down within the next day.
Using News and Trading Time Limit
Trade using the news can be used by finding a period of consolidation, short-term fluctuations before or after the announcement and trading breakout.
Discipline is very important here, although short-term trading offers an exceptional opportunity.
The Forex market is open 24 hours a day, 5 days a week. You can not stay awake that long, so you need to choose a time to make transactions. But the easiest is when prices are in a market open simultaneously. Trading hours London and New York is the most widely performed of trade.
Set a time limit on trade because it will help you to minimize the risk. Currencies will continue to fluctuate in the news. Set a time limit, how long you wish to trade can help stop you to make trades “hope” when prices move in the short term.
In addition, the currency transactions with a short duration are essentially high-risk discount. To minimize this, consider using stop orders.
Technical Analysis Help
Trade using the news would naturally lead to technical analysis. Technical analysis will depend on the analysis chart.
Technical understanding patterns and trends in the Forex market and the combination of economic news will give traders a wider horizon when the market will move in the short term.
The market is moving in a matter of minutes or even seconds will make dramatic changes given the economic news appears and it will be a very important moment for a Forex trader to react quickly
The combination of fundamental analysis and technical analysis can be a path to a successful transaction.