Forex News Trading – Chapter 14 | Learn Forex

If you are learning how to trade forex, then forex news releases play a major role. All short term traders should mind news releases. Even bigger political events affect long term traders too. News trading is an advanced level of trading, required a proper understanding of the market direction.

Economic calendar:

One can find about all the latest news releases and their data from the economic calendar. The economic calendar is available in a variety of websites. Below is the economic calendar provided by InstaForex.

Forex news trading
Economic Calendar by Roboforex

How to read an economic calendar?

It has some basic parts which you need to understand.

Date and time:

Exact date and time of the news release.

Currency:

News is for which currency which market.

Impact:

News impact indicates how important the news is, in other ways, how much it can affect the market. News impact in categories in 4 parts:

  • High
  • Medium
  • Low
  • Speeches (Bank governor speeches)

Event:

The name of the news release or event.

Actual:

The actual result or data releases

Forecast:

What data economists are forecasted.

Previous:

Last news releases data on the same event.

Graph:

Which shows all historical data on that specific news.


NOTE:

If “actual” is greater than a “forecast”, then it indicates positivity in currency.

Top Forex news releases:

Name Detail Frequency
Unemployment Rate The total workforce of a country that is unemployed. Monthly, generally during the 1st week of the month
Gross domestice products (GDP) GDP indicates the health of an economy, higher GDP usually good for the currency. End of each month
Consumer Price Index (CPI) Measures inflation rate Monthly
Interest statement Statement on current interest rate Monthly
Non firm payroll (NFP) How many new jobs added Monthly
Retail sales Data on consumer spending Monthly
Manufacturing PMI Industrial data, indicates industry expansion Monthly
Trade balance Difference between imported and exported goods Monthly
Speeches President, Bank Governor speeches On major events

Forex news release market effect:

Major news affects the market mostly. Before any major news release at least 5 minutes before, you will see a lot of price fluctuation. No clear direction.

After 1-2 minutes of any major news release market shows a clear direction. Sometimes during the new release does any big movement of 200 pips then correct immediately.

One of the biggest monthly news releases is NFP (non-firm payroll) data release. With good data, it can move markets up to 200-300 pips under 5 minutes.

Technical factor:

If NFP for US dollar outcomes positively then it will affect USDJPY most positively and EURUSD, GBPUSD negatively. As the US dollar gains strength, so all USD based currency pairs will move up depending on the other currency’s strength.

Conclusion:

If you are fisherman, then knowing when the storm will come, is a good choice, it saves fisherman’s life. News trading required proper knowledge of how the market could affect after a news release and how technical analysis can work out.

It is an advanced part of the trading. If you can not guess which direction the market will move after a news release, then it is better not to trade during that time until you see a clear trade signal.

Congratulations, you have completed the basic forex trading course. Now you can dive into the sea of forex trading. Try our partner brokers with the lowest spreads and earn cashback daily.

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