About News Trading

 

 

About News Trading

A very important factor of trading Forex is that the market is open and active 24 hours a day. Economic releases or any other news releases that will affect the currencies are published on a daily basis and in some cases in every few hours. This is the ideal place for traders that are accustomed to trade during the news releases as the market in such times tend to be very volatile and the prices change significantly.

Trading in news announcements can be very dangerous for a trader but at the same time it offers very good opportunities for a big market movement in a relatively short time period. For this reason traders need to be very careful and always protect their accounts on the downside.

More important is that you need to find a Broker that allows trading during those major economic releases.  If you are trading with a Broker that offers floating spreads then you need to know in advance that in news releases the spread will be widen and it may not be suitable for you to place a trade at that time. If you already have open positions that may be affected during the announcements you need to have in mind that the position may close in a worse rate than your Stop Loss. Brokers will always blame the market for such cases and there is nothing that you can do to argue against that. If you are trading with a Broker that offers Fixed spread then you may expect a small delay of executing your orders at that time simply because they may not be able to hedge their risk at the required rate. There is also a number of Brokers that will not allow you to place any trades during major news releases which might be better for a trader that is not familiar with News trading. 

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