Forex News Trading Summary

One of the major economies that most traders keep their focuses on is the economic and the political situation of the American economy. Also, you should watch out for indicators from the European Union although they may have a smaller impact than those from the US.

You may also check with heads of central banks announcements. This can give you ideas of possible increases or decreases in inflation and interest rates. Inflation has a direct effect on interest rates as when it goes up, banks try to leverage the interest rates.

Fundamental analysis comprises the examination of macroeconomic indicators and political considerations when evaluating one nation's currency relative to another.

Fundamental traders follow these news announcements, known as fundamental indicators or economic indicators, because they paint a picture of a currency's strength in relation to other countries.

Fundamental indicators are reports that include statistical data on things such as employment report, GDP, international trade balance, retail sales, manufacturing data, inflation and interest rates.

What you should know about trading the news in Forex

1. Even if you do not trade news it is important to know about the date and time the news are due, Especially major economic news that can result in extreme short term market conditions. Some traders, actually, prefer not to trade at all during economic news releases.

2. The less the forex price moves before news releases the greater the potential for a major market move after the economic news report.

3. Breakouts following the economic reports can sometime last for a very short period of time from several seconds to several minutes.

4. Generally, if the news did not carry any surprise or unexpected data then there will be no significant reaction in the forex trading market.