How much is important in the Forex to stay updated with the financial news?

When you just happen to be looking at a currency pair chart and you suddenly see an abnormal movement, this usually means that there was a news release.

Any currency in the world is affected by several different news. They can be either political, social, economic, among others. The fact is that a country’s currency is affected directly by the different financial news.

This is why it is so important for Forex traders to be aware of the different economic indicators as well as of the different news events that may come out during the day or week.

Here are the 5 market news events that usually increase the Forex market volatility:

#1: Central Bank Rate Decision:

Every single month, each Central Bank meet to decide whether they will maintain, increase or decrease the interest rates. While an increase of the interest rate usually gives a bullish sign for the currency, a decrease of the interest rate gives a bearish signal and it should decrease in value

But the announcement of the new interest rate is much more than that. This is when the Central Bank of each country provides a general overview of the economy as well as their vision for the future. Now, depending on how traders and investors interpret their words, the currency can either go up or down.

#2: GDP:

The GDP is one of the most important indicators that measure the health of a country’s economy. So, when the GDP report is below the market expectations, the currency tends to fall; when the GDP is above expectations, the currency is likely to rise.

#3: CPI (Inflation Data):

The CPI (Consumer Price Index) is the most widely used indicator in terms of inflation. Usually, when inflation is seen as moving beyond a determined target, interest rates will tend to rise because they are used to counter inflation.

#4: Unemployment Rate:

A country’s unemployment rate is one of the most crucial data for the market since it refers to the economy’s health. Usually, higher employment rates tend to lead interest rates to rise.

#5: FOMC Meeting:

In the world economy, all countries are equally important. However, if there are any financial news that only concern to a country that tends to affect all the economies all over the world, this country is the United States of America. So, when there is the FOMC meeting, which happens once a month, the rates are set. Plus, there are also the speeches about how the economy is, what’s good, what’s bad, and what suggestions the FOMC has.

Author: Editorial staff of 70trades reviews blog


How to invest in the forex?

If you’re thinking about trading the Forex market, there are some things that you need to consider learning before you actually start trading.

#1: Learn the Forex Trading Basics:

Knowing what is an exchange rate, a base currency, a long and a short position, the bid and ask price, the spread, among other terms, is crucial if you want to at least have a shot of succeeding in the Forex market.

#2: Read A Quote:

If you already watched CNBC or Bloomberg, you probably already know how to read a quote even of you never traded any financial instrument before. On a Forex quote, you’ll have the bid price on your left and the asking price on your right.

#3: Decide On The Currency You Want To Trade:

When you’re just starting to trade the Forex market, it’s better if you just trade one currency pair or two max. This will allow you to know everything that is going on in the countries, about the economies, what you can expect, what others expect, etc.

#4: Open Your Online Forex Brokerage Account:

When you head to this step, plan to be here for quite a while. One of the problems of the Forex market is the brokers. There are too many scams out there and it pays for you to be careful. So, instead of choosing the first Forex broker you see, make sure that you do a good research about the different brokers.

#5: Start Trading:

Now it’s finally time to start trading. So, the first thing you need to do is to analyze the market. In order to do this, you can use one of three different strategies:

– Technical Analysis: Implies looking at the past charts and patterns and try to predict what the currency pair is going to do now.

– Fundamental Analysis: Implies looking at the economic fundamentals of a country and base your trading decisions on them.

– Sentimental Analysis: This is the most difficult analysis you can o and it’s usually done best by more experienced traders and investors. This strategy implies that you try to figure out the mood of the market and define it as bullish or bearish.

#6: Place Your Order:

When it’s time to place your order, you need to know that, depending on what you want to achieve, you can choose from 3 different types of orders:

– Market Orders: You’ll simply be telling your broker that you want to buy or sell the currency pair now, at the current market price.

– Limit Orders: You’re telling your broker that you have a specific price for the order to be filled. If the price isn’t reached the order won0t be filled and you’ll retain the money on your trading account.

– Stop Orders: This is when you choose to buy a currency pair above the current market price because you’re anticipating that the price will rise.

Author: Editorial staff of 70trades reviews blog

What Is The Online Trading?

Simply put, online trading is the act of buying and selling any financial product through an online trading platform. Usually, trading platforms can be provided by the online broker you choose or they can be independent. In the case you’re interested in trading the Forex market, one of the most used trading platforms is the MetaTrader platform, which in independent from any broker.

Since it’s one of the best Forex trading platforms, many online brokers recommend it and you can use it without any problem. Either when you want to use a demo account or a real account, you just need to open an account with the broker and download the MetTrader platform to your computer, When it asks for your login information, you should use the data you got from your broker and you can actually trade using it. This makes online trading a lot easier.

In the old days, when you wanted to buy or sell a stock, you would need to call your broker and tell him what to do. With the Internet and the new technologies that are now available, you just need to download and install a simple software and you can start trading online.

One of the main advantages of Forex trading is the fact that, even if you’re a beginner, you can test your skills before you start trading real money. For that, all you need to do is to open a demo account with any broker of your choice – and this step also allows you to know more about the broker and how reliable they really are -, and start trading. You can choose the amount that you’re going to start with and then you can practice for the time you want.

Even if you’re not a beginner, demo accounts are a great way to test your trading strategies in real time. Even though you may have designed a trading system that has been proved to work with backtesting, this doesn’t assure you that it still continues to work. So, opening a demo account and following all the rules of that trading system will allow you to know if it’s working, what’s not, what can be improved, improve it, and start over once again.

Another important advantage of online Forex trading is the fact that there are no commissions. Unlike when you’re trading a stock, where you need to pay the broker the transaction fee, in the Forex market that fee doesn’t take place. The only thing you need to pay that slightly resembles a fee is the spread (the difference between the bid and the ask price).

Author: Editorial staff of 70trades reviews blog