How to follow the news in trading

In the field of trading there is no definite opinion about the impact of news on trading - traders are divided into two camps. Some of them believe that the possession of any information brings only benefit and unnecessary can not be. Others, on the contrary, tend to believe that the trust of various media leads to emotional behavior and violates the already built system of trade. However, many traders still hold the position that it is worth taking into account news information only to varying degrees.

 

Classification of important news

 

The information base is limitless nowadays. It is impossible to predict whose words or what data will affect the financial market, therefore, it is very difficult to keep track of everything at once. But still, we can highlight the main types of current news for Forex:

• Related to natural phenomena. Financial markets are often affected by news of cataclysms that could change the functioning of the economy.
• Social. Related to unemployment, wages and social benefits.
• Political. It refers to elections, the imposition of sanctions and changes in laws. This type of news has become especially relevant in recent years.
• Economic. This type concerns all the actions of central banks, as well as everything related to the level of inflation, budgets of countries, state debts and gold and foreign exchange reserves.
• Corporate. This includes information about all the actions that individual organizations take (launch of new projects, change of leadership, etc.)
• Stock. Mainly related to the issue of stocks and bonds, also with stock indices.

 

In addition to these types, the news is still divided into species: projected and unpredictable.

 

News that comes out in a pre-designated day and time is predictable. These include briefings, press conferences, reporting publications and more. Usually the topic of such events is well known, so most traders prepare tactics for themselves in advance, depending on what information they report. Many brokers publish announcements on their websites in the "Economic Calendar" section.

 

Unpredictable news appears at any time, so to be prepared for their appearance is quite unrealistic. Such news often contain negative information: hurricanes, floods, technological accidents.

 

How to use news in practice

 

In total, there are two schemes relating to important news for trading. Those who adhere to the first scheme, tries to stop trading before the news. To do this, the broker's orders do not open or close if there is a significant event in the economic calendar.

 

Adherents of the second tactic try to predict the behavior of financial markets after the release of important news. When data causes an increase in volatility, there is an opportunity to earn. Such Forex trading is more common to experienced traders.