How is News Trading being used as Tool in the Forex Market?

  • April 2014
  • Posted By Ninoslav
  • 0 Comments

Trading on the news, or more commonly termed as News Trading, is not something new in the horizon. Making use of information regarding occurrence of certain events for the cause of business is not something that has been unheard of. And that practice has spread to Forex Market also.

How can any news affect a trading scenario? For example, news of a newly elected government has raised concern about changes in financial policies. And this news has prompted a movement in the market regarding inflow and outflow of funds. Such a situation is bound to affect the currency rates as well. So, wouldn’t you like to cash in upon hearing such news? Hopefully you have got your answer.

What can be the sources of such news?
Conventionally, such type of news is obtained by word of mouth, which news agencies claim to be “inside sources”. Henceforth, it can be treated as a manual way; news that can have some impact on the market is obtained from a human source or press releases. And as mentioned above, this manual way has been the norm for many years.

But in this software age, isn’t there an automatic counterpart for every manual activity? As a result, software programming and algorithmic trading that is event-based has also made available an automatic way of trading on the news. With such software, traders can tune their computers to continuously monitor feeds of live news and get alerted on any specific news that purportedly can have an effect on the market and currency rates.

So, that was just about use of News Trading as a tool. If you want something of similar interest, read on the lines of “How Scalping is being practiced to maximize profits in the Forex Market”.

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