With the world going through the fourth industrial revolution, namely the digital transformation revolution, these are indeed exciting times when it comes to forex trading because the volatility rates are quite high.
Forex traders are exposed to a myriad of tools that are sold as key to creating trading success for those who are seeking it. Nevertheless, out of all these tools and advice that you may get from subject matter experts and “forex specialists”, the one key tool that you can reply on is the news. Global forex news coming from credible sources such as Bloomberg, Reuters, the Financial Times and many others should be listened to very carefully. So here are top three tips on how to trade the information provided by the news.
1. Navigate the world’s economic and political situation
Keep your finger on the pulse when it comes to current affairs. The beautiful thing about the news is that there is always something happening around the world that is useful to any forex trader. Some forex traders have asked that if they don’t read the news then they are uninformed and if they read the news then they are misinformed.
So, where do you close the line? Where do you pick your best bits? Well, the answer to this to constantly analyse and watch out for what is happening in the markets and in the business world, and events.
The most successful traders navigate the world’s economic and political events with ease. They are the ones who are able to judge the reaction of the markets and adjust their trades accordingly. Think of the bigger picture and not just what is happening locally or just in your industry.
2. Plan in advance
The old cliché of “fail to prepare, then prepare to fail” is so cheesy but so true when it comes to forming the basis of your forex trading. Forex trading has the powerful potential of creating long-term profits.
Now, when it comes to checking out things like daily political and economic events globally, then I understand that it may not be easy to plan ahead because that news comes quickly, and you have to make decisions quite quickly. However, news and current affairs is what cause the prices of currencies to fluctuate. If you have a good grasp of global news, becoming competent in forex is certainly a wise decision.
Having an earnings calendar is useful when it comes to planning. Such calendars can allow you to plan ahead of certain events and global festivals. There are at least two or three pieces of important economic news each week which affect the sentiment of markets. Check out any important announcements about recent economic performance and interest rates. If you want to get a free forex calendar, then get the Forex Factory. We also have one which is more suited to our services.
Now, the advantage with LeoPrime is that we run five days a week, and don’t usually operate doing the weekends. Why is this an advantage? Well, it allows you to plan your week ahead by getting things in order by Sunday evening for the following week.
3. Straddle trade
This is when you are looking at both sides of the trade. Meaning that you should look carefully at the range an hour or so before the actual news release (most traders see it usually 30 minutes beforehand). Why? Because the advantage is that the high of that range will be your upper breakout point, and the low of that range will be your lower breakout point. Those breakout points will be your entry levels. It doesn’t really matter which direction the price moves, the straddle strategy will have you positioned to take advantage of it. Ideally, your stops should be placed about 30 pips below and above the breakout points.
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