The foreign exchange market is as big now as it ever has been. The influx of new traders thanks to the digital transformation that the sector has seen has kept it as the biggest financial market around. Even the London Stock Exchange with its $4.5tn market cap cannot compete! The sheer range of currencies to trade, high liquidity and potentially big returns all make it one of the best options to consider as a trader.
If you are trading in this market, then you will be well aware of one thing that makes a big difference to how it moves: news.
News moves price
In very simple terms, this is all you need to know! Currency pairs will either go up or down in price over time – you make money if you have opened a trade in the right direction. What moves prices? The major factor is breaking news and official releases from governments as to the state of their economies.
All this will see the various currency pairs react and the price go up or down depending on how this affects each currency in the pair. If, for example, the UK Government released very strong figures on employment, then you could see a currency pair such as the GBP/USD go up as a result. If it was a pair in which the pound was listed second (such as the AUD/GBP), then that pair would probably go down as the pound may then be stronger in it.
How can you stay updated with the latest news?
The above shows why you need to take steps to always be up to date with breaking news and upcoming events. It allows you to plan for how future news releases may affect your trades or react to breaking stories to protect your trading account.
Here are some of the best ways to get the freshest FX news:
- Specialist FX websites – the first port of call for any trader each day should be a specialist forex website to get the most up to date FX trading news. These sites are great as they are focused on currency trading, and all the news on them is relevant to what you are doing. Many will also provide commentary on what it may mean for different pairs and suggestions on how it may move the currency market.
- Read the papers – much of keeping up to date with news now relies on modern technology and the internet. However, it can sometimes be worth looking through print media such as the Financial Times. These may have different information in them and also different investment options if you are looking to diversify from only trading in currency.
- Television – another way to use the media to your advantage with forex trading is to keep an eye on the TV news. Many channels will run dedicated 24/7 news programmes, such as the BBC. These are also useful for getting news on political or economic events that could affect your currency trading decisions.
- Speak with other traders – this is another very useful tactic to have in your arsenal when trading currency. Very often, traders themselves may have heard news that you missed or that was buried in the media. Of course, you need to be careful about who you trust. If you do have a network of other traders that you can count on though, either online or in person, then this is a good way to get the latest currency gossip.
- Podcasts – podcasts in general are becoming very popular within the media. In terms of currency trading, they can also be a great way to access the latest news in a more insightful and informal way. Podcasts are also worthwhile as many can be focused on specific pairs or aspects of trading, so you can find one that caters directly to your needs.
Don’t forget about social media
Of course, in the modern world, you cannot ignore social media. Keeping an eye on your smartphone through the day will mean that you stay updated with the freshest news wherever you are, as it happens. The biggest social media platforms, such as Twitter, will all have accounts on there that give reputable and up-to-date forex news to discover.
Successful trading requires the latest facts
Trading successfully requires keeping up to date with the news and upcoming events. After all, if you read that the UK Government is about to make a decision that may send the GBP falling, then you know not to back this currency to move up against any others for a while. In essence, this is what makes having the freshest news to hand so vital and important for trading success.