Learn to Speculate on Foreign Exchange Market with News Releases, Country and Financial Reports

Forex market speculation is considered to be a quite profitable and in parallel exceptionally randomness-ridden way to make money. Operators who wish to get oneself in this market usually choose from many trading strategies that operate differently under different market conditions. Many of such techniques are based on the chart indicators, price and candlestick patterns. Not many traders prefer to use the fundamental indicators as the main basis for their position taking. In spite of this fact, speculating on foreign exchange market news, economic and financial indicators (such as cash rates) can be quite rewarding, especially if you get accurate market information.

The main foundation of the fundamental or news speculator should be a detailed analysis of the macroeconomic indicators that define the robustness of the given currency. It’s quite important to follow the news and be current with the latest picture of the fundamental situation in a country or a monetary union. It's good that there is only a small amount of important fundamental indicators that should be followed, unless, of course, one is trading a lot of currency pairs, including the exotic ones (it's not a recommended strategy if you want to obtain an expertise level in fundamentals). To point those few indicators worth following I’d mention GDP, employment level, real estate market indicators, inflation, industrial production and productivity, export and import prices, consumer credit, PMI indicators, etc.

Another crucial long-term factor that can be utilized by the news traders is the official rates determined by the global central banks. The lower is such rate the less expensive it’s to borrow the currency and use it to purchase a more high-yielding asset. This results in the devaluation of the borrowed currencies. Quite often the security purchased with this less expensive currency is some other currency that has a higher funds rate, which leads to strengthening of the latter. This is usually known as carry trade. Advanced Forex speculators browse and try to predict the interest rate hikes and cuts and speculate with their currencies accordingly - they are trying to gain from both the difference in the official rates and the common Forex speculation.

A good example of a news trading event can be to go long on NZD/USD immediately after a fundamental release that shows some weakening in the USA economy. It’s not that difficult but can be connected with certain risks as the price often moves with a very high volatility during these reports. It’s usually a good idea to wait for some time after the report and hope for a long-term trend setup.

But if you plan to speculate the currency news frequently by entering the market instantly after the news reports, it’s necessary to get a right Forex brokerage for your order execution. The major part of brokers widens their currency spreads seriously during the news releases and quite often fails to place orders by sending "requote" message. It’s a must to check whether your broker is tradable during the news before using the tactic on the real money account.

A good source of the macroeconomic info is also very important if one wants to be a news or fundamental trader. First, you need to be up-to-date with the most recent economic indicators - global news sites and the official sites of the government stats are fit for that. Second, you’ll need some source of the latest news - financial calendars and up-to-moment Forex news sites are a good solution here.

If a speculator wants to get the knowledge of the recent developments in the currency market and the attributed economic indicators, it’s recommended to bookmark this Forex news site and be up-to-date with the important releases. A trader will also find useful the table of interest rates, which offers the most recent information from the top 20 influential central banks.