The Forex Market is Moved by News

When it comes to trading, knowing technical analysis isn't enough. It's just as crucial to understand what moves the FX market.

There is a fundamental power underlying the trend lines, double tops, and head and shoulder patterns, just as there is in the huge Star Wars universe.

The news is the name of this force!

Consider the following situation (completely fictitious, of course!) to grasp the significance of the news.

Let's imagine you hear on the evening news that the world's largest software firm has filed for bankruptcy.

You possess stock in this corporation.

What would you do first if you were in this situation？ What impact would this have on your opinion of the company？

What do you think other people's opinions of this business are？

The natural impulse would be to sell all of your stock right away.

In fact, just about everyone else with an interest in that company would probably do the same thing.

The truth is that news has an impact on how we think about and act on our trading decisions. When it comes to currency trading, it's no different.

However, there is a significant difference between how news is handled in the stock market and how it is handled in the forex market.

Let's return to our previous example and pretend you heard the same story about the huge software business filing for bankruptcy, but you heard it a day before it was officially revealed in the press.

Naturally, you'd sell all of your stock and, as a result of hearing the news a day earlier, you'd make (save) more money than everyone else who heard it on the evening news.

Isn't that excellent for you？ Unfortunately, this little ruse is known as INSIDER TRADING, and it will get you arrested.

Martha Stewart pulled it off, and now she has a mug shot to go with her magazine covers.

It is prohibited in the stock market to hear news before everyone else. It's known as FAIR GAME in the currency market!

The better the news is for your trading, the earlier you hear or see it, and there is no penalty for doing so!

Add in some technology and the power of rapid communication, and you've got the most up-to-date (or not-so-up-to-date) news at your fingertips.

This is fantastic. “good news” for retail traders because it allows the US to respond to market speculations fairly quickly.

Big traders, tiny traders, husky traders, and skinny traders all rely on the same news to move the market since the market would barely move if there was no news!

The forex market is influenced by the news because it is the news that moves the market.

The news is the fuel that keeps the currency market rolling, regardless of the technicals!