Forex (short for Foreign Exchange) is currency exchange. The value of national currencies is important to most people around the world, whether they realize it or not, because foreign trade and international business are impossible without currency exchange.
If you live in Germany and want to buy gold from Russia, then either you yourself or the importing company must pay for these perfumes in yen. To do this, you will have to exchange the equivalent amount in euros for yen.
The same goes for travel. A German tourist in Russia cannot pay for an ice cream in euros, because this currency is not accepted for settlements in the country. Therefore, he must exchange euros for the local currency - in this case the ruble- at the current exchange rate.
The need for constant exchange of currencies is the main reason that Forex remains the largest and most liquid financial market in the world.
Forex news today shows that its daily turnover exceeds $5 trillion. This is more than the turnover of all national stock markets combined.
What is Forex Trading?
To understand what happens in the Forex trading market, let's take the euro/dollar currency pair. As in the exchanger, each pair in the Forex market has two prices - the bid (BID), this is the price at which the broker is ready to buy the currency from the trader, and the ask (ASK), this is the price at which he is willing to sell it.
The difference between the bid and ask indicators is called the spread, it can be fixed or floating, depending on the type of currency pair. The broker takes the spread, just like the exchanger takes the difference between the selling and buying prices. The trader takes away the direct difference between buying/selling a currency.
The EUR/USD pair means that when determining the price of one EURO, we assume that we will buy it for the US dollar.
The prices of these currencies are formed on the basis of supply and demand, which, in turn, depend on all kinds of Forex news information in the world (economic, political) and other different kinds of factors.
If we expect the pair to grow (for example, the euro will rise against the dollar), then open the EURUSD currency pair chart and press "Buy", opening a deal with the selected volume. If the pair grows, so does the profit. If necessary, we close the deal. You can close manually by observing the market movement or automatically by setting a profit target and a loss limitation price in advance (you do not need to keep the terminal open in this case). And, conversely, if we are waiting for the pair to fall, then we open a "Sell" deal and make money not on the rise, but on the fall in the rate.
This international market is unique in particular in that there is no single central forex exchange. Typically, Forex trading is carried out electronically in the over-the-counter (OTC) market: in other words, transactions take place through computer networks between traders around the world, rather than on one centralized exchange.
Transactions are made 24 hours a day, five and a half days a week.
Forex news trading strategies
Trading news Forex is remarkable. The main advantage of such trading is the ability to make good profits in a short time. This high profitability makes Forex news trading strategies very popular.
However, such techniques are not only highly profitable, but also very risky for Forex news traders.
First, such sharp price impulses can, on the contrary, lead to serious losses in the event of an incorrect forecast. Secondly, it is not always possible to accurately predict the direction of the trend after the release of the Forex news.
That said, news trading Forex does not require any specific knowledge of the rules of technical or candlestick chart analysis. On the contrary, at such times the standard trading rules usually do not work and only the published Forex news for today affects the price movement.
When trading according to the Forex calendar news, it makes no sense to apply the rules of technical analysis and pay attention to Price Action patterns.
How to trade Forex news today?
First of all, Forex news traders need to determine the range of the most significant Forex news affecting the trading assets with which he works. After that, it is necessary to regularly monitor their release.
What assets to choose for news trading Forex?
The choice of an asset depends on the Forex news factory. For example, all Forex news live related to the US dollar will have the strongest impact on currency pairs with USD (EUR/USD, GBP/USD, etc.).
Experienced Forex news traders generally recommend using only those currency pairs in which the US dollar is present for news trading. They are more liquid and react more strongly to important economic news Forex.
If the Forex news live affects another currency, then it is better to choose an asset where this particular currency is paired with the dollar. For example, Forex news on gold in general affects currency pairs with gold. Swiss franc news affects CHF pairs and so on. The first currency in such pairs must be the US dollar - USD / CHF, USD / JPY, etc.
Recall that any economic news trading Forex is subdivided into important (urgent) and periodic. The former have the most powerful and unforeseen influence on the schedule.
Forex news for today
To monitor Forex news for today, special economic Forex news calendars are used (an example of such a calendar is shown in the figure above). They are available on the online web platforms of all popular brokers.
AtoZMarkets publishes only important Forex news today that has the strongest impact on the market. The five Forex news factory categories listed below always lead to increased chart volatility:
NFP (Non-Farm Payroll). The number of people employed in the non-agricultural sector.
FOMC (Federal Open Market Committee) meeting news.
Trade balance data.
Retail sales data.
Forex news today from these five categories is the most important and always has an impact on the market. It is also recommended to pay attention to the data on discount rates and inflation, Forex news about various geopolitical events, news of any meetings of the Central Bank and data on the GDP of the countries with which currency you work.
We also recommend that you familiarize yourself with the basic approaches to constructing the consumer price index (CPI) . This will help you better understand the foreign exchange market and make correct predictions.