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/// Common Forex Terms: News Trading

26 Jul / 2013
Author: champ Comments: 0

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One of the major factors that impact the forex market and currency movements is news releases. These news releases include economic data from the countries all over the globe and major policy announcements by governments. Such economic data and policy announcements act as catalysts for sharp movements in the forex market and their impact could be on a short-term basis or at times last for considerable period. The currency market consists of eight major currencies and around 17 derivates. Approximately seven news releases related to the eight major currencies and other closely watched currencies are released every day on an average.

When you begin to trade in the forex market, you should closely follow these news releases so that your news trading does not go against the trend. Usually, the expert economic analysts predict the economic data but at times they could also go wrong due to extraneous circumstances. In such a situation, the divergence from the anticipated data level causes the concerned currency to move sharply up or down.

When you keep a watch on such news releases continuously by having the economic calendars for the currencies in which you are trading, you would be able to ride out the swinging momentum. You could limit your losses either by placing a stop or loss order or by closing your position immediately on the arrival of the news. This is the effective way of dealing with news releases and become a successful news trading expert.

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