One of the biggest wrong addresses given to novice Forex market traders is that the news is important. While it is affecting financial market news, ITBFX broker suggests asking yourself this question:
“Which one is more important? The reason for market dynamics or market dynamics themselves?”
about Forex news, why is it important or what?
When I had started trading, I was constantly looking for the cause of raising or falling in currency pairs. I was trading, and the market was going against me. I would take a loss and then look for reasons for my loss. In most cases, there are people who can explain in Forex forums that, for example, currency A falls overnight for economic reasons B and C. The daily Forex news is filled with such information and reports. However, this information can be true, but in the end, the information is not so important, and what is important is to know that currency A has fallen.
When I started to focus on the why and what dynamics of the currencies, I realized that it was quite irrelevant to realize what a currency pair would lead to a certain direction. Yes, I realized that understanding or knowing why the news did not contribute to the quality of transactions. To better understand the reason of my losses, I had to know that I had broken the upper and lower boundaries and the trend line in my loss trades. If a deal leads to loss, we are clearly on the wrong side of the equation.
You can fight as much as you want about the triviality of Forex news with us, the market and professional traders, but you may lose hundreds thousands of dollars in this way. Most people are constantly concerned that the market is not going to go right. I know people who were driven to bankruptcy during the last decade’s financial crisis. They were constantly engaged in the matter, arguing with me that ” this ridiculous fall of the stock market cannot continue forever.” In the end they were right, and the financial crisis did not last long enough to make them bankrupt.
A rough story
As an example, we will show you why what is important in Forex news more important than why. So we invite you to read the rest of this article:
Once upon a time. He was a relatively fortunate trader who had been a so-called trader between 1999 and 2006. We don’t mention his name here because what matters is his experience, not his name, and of course the document is an article, not a biography. however, this quasi-famous trader did not earn his reputation from trades, but he had learned it from trading training. In 2006, when the USD/JPY currency pair was broken for reasons that were not discussed in this opportunity, he began doing short-term transactions of this currency pair. Do you know what his argument was?
He was going into trades by following the daily news. It was his habit. He never went to work until he went over the news. The argument that was based on the news of Forex was that money would flow back into Japan in the form of a secure trade. This argument was quite true. At last, as the poet says: “It did not remain and it will not remain so”. So what was the problem with his work?
The issue was that he was 6 months ahead of the market, meaning he had entered the USD/ JPY short term positions, 6 months earlier. He was so confident of himself and of course the Forex news that he continued to lose his account. Although he was rightly so, the reality was that USD / JPY was up all the time he entered in the short term positions. Conclusion: In a situation similar to the conditions of this rough and true story, you have two options: either you are right, or do a good deal and make a profit.
After all, you get Forex news later than you think.
This fact makes every professional and novice trader crazy. Fifteen years ago, when I was a newcomer to global markets, many people were trading with following Forex news. There is, of course, a period in the Forex world where the traders could profit from following the news. There are also plans to scan the news and make transactions instead of the traders based on keywords.
But the point is that there is not only the news will reach you with less speed (because traders who work with banks and hedge funds will cost thousands of dollars now also have programs that can scan the news and make transactions instead of the traders based on keywords and receive first-class news sooner than anyone else) but, your performance as a regular Forex trader is lower than them. And, as well, your bank accounts are probably not equal to their billion dollar accounts. They are the ones who can really drive the market in a certain direction with their trading actions.
This does not mean that the news should not have a place in your analysis, but it means you need to examine it from the longer-term perspective. For example, if you get some poor economic news from Canada, you might think that the Canadian dollar will have a downtrend. It’s not a bad conclusion, but it doesn’t mean that you have to hit the sales button right now. It is also meant to be aware that the news may have the potential to impact on the currency. In fact, the news here comes handy to remember them for longer – term movements. It’s almost impossible to know what happens in the next five minutes on a news headline. liquidity is a much more important issue, and of course, until you press the buying / sales button, the transaction machines have made thousands of deals.
Don’t complicate the trading
Beyond these, I was not the trader for turning into an economist. how about you? It is true that we must learn to analyze and analyze to perform our transactions. But are we going to be an economic analyst? Do you think anyone who is an economic analyst or economist is the trader or wealthy? However, I think most people enter the Forex market to trade and make a profit. In this market, there is no importance that each of us wants to earn money. That is why there are different systems and strategies that different people from each of them get their own results. For this, what we want is to have a simple strategy to pursue; a strategy that we would like to pursue and make money. I would like to say that if you see a sales signal, sell it. Easy as that. This doesn’t mean we shouldn’t follow the news to see if the big news that can move the market is on the road, but you don’t know what to do when you follow the news, with an Excel and thousands of useful data to say what you should do right now, you will not face it.
It is almost impossible for you to collect all the news information and ask them for a moment to accurately predict the market or a particular currency. Why? That is because there are factors and hundreds of other competitive reasons why people choose their short – term or long – term positions. If we break up our resistance, we go higher. If we break support, we go lower. Does the reason matter to you, or do you prefer not to waste time, doing the trading and making a profit?
On the official website ITBFX, on Instagram page and the news channel of this agency, we give you so much information, training and economic news that you can achieve your financial goals by following them in the lowest possible amount of time. So, as described above, don’t get over it and don’t bother yourself with a lot of information that may not work. Trust us. Open a demo or real account and start trading. We are until you are successful.