Hi to all,
I m new in Forex world. I alredy opened a demo account. I have problems understanding news. Can someone explain me how should i use news and economic calendar for my trades?
LP Daniel
Keep in mind that market volatility increases significantly during certain news as too many traders enter the very next moment after certain news have been released. As too many pending orders are put in queue it can cause delays in execution, while there is no specified price anymore. That causes slippage and sometimes lead to losses because you can completely miss the move.
Regarding interpretation of economic calendar next things will be useful to know: News impact (high, medium, low), previous, forecast and actual readings. Try to trade news with high impact like US NFP, GDP, PMI, REtail Sales, Central Bank speeches and updates. If a reading below forecast - basically you should sell the asset you trade, better than forecast - buy the asset. You should also consider market sentiments, because if news outcome were not expected by market majority - it will cause huge price movement (good trading opportunity for some traders)
Cheers.
Hi
I am more comfortable doing trades with technical analysis. Technical analysis is a security analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and Volume. In past was also news releases and that is included in our charts. But im looking our economic calendar on babypips.com and most of that event have bigger impact we should expect it to have on market prices. Is it posible that we have more and more news trader??? I think that is the best for me to step aside that day when is economic calendar full of events.
LP Daniel
You don’t need to understand news as a must to do trading. Try to concentrate on technical analysis especially on higher time frames to get a good grip on your trading.
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Before you have learned more about fundamental analysis I would recommend to use the Forex callendar to check when there will be high impact events and to avoid trading during those periods.
I agree with you. i need to gain more experience in trading. For now my trades are based on 1 and 4 hour charts.
Lp Daniel
I tried to include news in my trades but i think that is to early for me as i mostly don´t understand them. I will step aside that day when high impact news will be scheduled.
LP Daniel
Neither do I.
To be honest, I’ve never been interested enough in them to want to understand them, really. Economics isn’t my subject. I prefer statistics and probability.
They do affect currency values, of course. But (as is true of all influences on the market) the price changes they cause are expressed in the market in the form of imbalances between buying pressure and selling pressure; I’ve always preferred to look directly at those, and to think about price-movements in terms of those, without particularly caring what’s caused them. (I think this is probably very much an intraday trader’s perspective, rather than a long-term trader’s, but I’ve never wanted or intended to hold positions open overnight anyway, so it’s always suited me.)
That’s always been my approach. Gradually one learns how long it’s wise to step aside for, in each case.
Perhaps do the opposite, instead of ‘stepping aside’ get to learn how to take a view - just like using TA for a directional sense.
So to tomorrow is Monday, often devoid of ‘news’ but so happens that there is manufacturing PMI data on three large economies being released.
PMI is viewed as leading simply because if you are a purchase manager for a large corporation and you are upbeat, then you are buying and there has to be a reason - fundamentals are that simple when learned.
So if you are a Chinese manager and you are not for buying, and Aud relies on China, and China happens to be a major manufacturer - then would you buy Aud on negative Chinese manufacturing pmi?
Just gives you a directional sense.
Then again UK manufacturing pmi is also due for release, so with Brexit maybe negative, it’s red flagged, but is the UK a major manufacturer?.. good chance that negative will be anticipated, so maybe not so much a reaction … again that simple, positive here would carry a greater directional short term sense.
Then of course there is USD, again you get into the ‘mood’, the Fed want to raise rates and have indicated so, but they need the numbers to justify. The market has reacted first to the notion of raising as per the statements, but the numbers rule - a negative pmi will suggest a negative NFP later in the week and the Dollar will get sold - again a directional sense.
Just simple reactions of fear and greed.
Hi Lexys,
I am glad you are back on my thread. I will try to concentrate more on technical. Of course im going to check daily economic calendar just to avoid trades with big impact news. That is all for now. But i will do my best to start including news in my trades in the future.
I m newbie so i can be wrong from time to time but with profit wrong 
LP Dani
Hi Dani,
Like other else stated before, you must master the technical analysis first before using the news.
Just few opinion that might be useful for you (this is solely based on my opinion):
- Not all news is needed, basicly 95% of my trade setup is not affected by news. but I do sometimes trade news. The big news only. such as Brexit.
- If someone really rich and famous suddenly tell you what he is up to. don’t directly do it. Check with the chart using technical analysis. because sometimes they just want to check with market demand only.
- If you want to use news, please combine with other news to check whether this news is valid or not.
Hope this is useful
Good Luck
That’s really the best possible thing to do under such circumstances. I generally apply it to all my trading - if I don’t understand something about the market, I refrain from trading in that moment. Of course, I also strive to learn and improve myself, but in the meantime I don’t take unnecessary risks.
Hi Peterma,
I agree wit you but you need to understand that i m new in forex world. I m more comfortable with statistics so i will try to be profitable with TA for now. I try to include news in my trades but i was so confused. There is so many news and all of them is for me important. I need to take some time to research what news should i include in my trade and other to exclude. When i read some big impact news i just can not understand is that buy signal news or sell signal news. Forex is long process learning. As i did not know anything 2 month ago about forex im very happy with knowledge i gained in past 2 month. But i m still on the start. I m using demo account just to be clear.
Thanx for the support.
LP Daniel
When I was a novice trader then I used Economic Calendar blindly, like based on forecast and actual data only, then most of the time I lost my money! Because, fundamental analysis don’t mean only Economic Calendar based trading, there have so chapters of news trading, and you have to gather all of them, if you wanna do news trading comfortably!
If you want to understand news you should study fundamental analysis, I doubt anyone can explain it to you in a few sentences in a forum post. Beyond that, high impact news mean volatility, and I, personally, avoid trading during such periods.
Hi if you say a longer time frames where those they start? For 1h or 4h?
Hello which trade setup do you use? I’m also a new in forex trading I’m studying the course on this site
@dani1983 to put it most simply following any economic news traders are going to go either risk off if they think they is more uncertainity in the world and risk on if they think they is more certainty in the world.
So now we know this what are risk on and risk off assets ?
RISK ON
S&P 500
Exotic Currencies
US100
RISK OFF
JPY
GOLD
There you have it a very simple 2 step process
Let me know what you think
Hi Dani; how are you? I am really curious to know your current trading status? Are you here? And what’s the update on your fundamental learning!
If you try to trade the news and don’t really know what you’re doing, you will most likely lose your money. Like most here have said, focus on the basics first, look at long term price direction and focus on main support and resistance zones. Keep your stop losses wide enough so you don’t get stopped out in the event of a news event, those reactions are mostly just temporary.