It seems that the US non-farm payroll is well-monitored, so it triggers huge moves in the USD. If I were to take a safe strategy and bet plenty of money on a few news releases which are more well-watched, like this US NPF can you suggest any? I know news release calendars would always indicate the importance of the news releases as high medium or low, but I observe that there are varying potency even within the high importance group. So can you suggest (from experience, and not economic basics) those which the most important even compared with the others of high importance?
Well Kafee, safe is not quite the term here but the expected relative impact. right now any news fro the eurozone are huge market movers. About a month ago it was all about “sequester” in the US. follow the progress on major economic and political happening, but beware of NFP and ECB.
Cheers
GRIX
You’re talking about trading news spikes which unless you understand the underlying economics is pretty risky. IMO.
If you’re asking this question then you should go to babypips school on fundamentals 101.
Consider this: the news releases that MOST affect the market are constantly changing. Right now, for example, the market is watching the FOMC Minutes like a hawk and any clue from Ben Bernanke towards more QE or less QE will make the market go crazy. Also the market is currently focused on Inflation (CPI and PPI) and Unemployment (NFP), since the US is coming out of crisis and Europe is showing signs of stagnation.
But that’s just right now. Right now the market doesn’t really care about Trade Balance releases because it’s too focused on monetary policy being used to spur growth.
But maybe in 3 years it will change, and the market will have its eye on other factors.
I have to honestly say that there’s no such “safe” strategy. If you want to be completely safe, one thing you can do is not to trade the news releases at all, since nobody knows where the market could be heading to. Also, it is not recommended to bet more on a few news releases that are well-watched. Every stake that you put has to be consistent at all times, regardless of how confident you are.
Generally, which news to look at will depend on the general economic condition of the respective country. For example, if the U.S growth is currently on the watch, unemployment rate, retail sales, housing numbers and other growth related events will be important to look at.
Announcements on interest rates and speeches from the central banks may give a significant impact on the market as well. However, if speculators have predicted that nothing new will be announced from the central banks, events like FOMC statement and RBA statement would not interest the players, giving the market less or no significant movements.
So, basically fundamentals are just guides for you to trade. Is it best to wait for the release before you enter your trade or trade it base on projections or forecast?
[QUOTE=“kaffee;471292”]It seems that the US non-farm payroll is well-monitored, so it triggers huge moves in the USD. If I were to take a safe strategy and bet plenty of money on a few news releases which are more well-watched, like this US NPF can you suggest any? I know news release calendars would always indicate the importance of the news releases as high medium or low, but I observe that there are varying potency even within the high importance group. So can you suggest (from experience, and not economic basics) those which the most important even compared with the others of high importance?[/QUOTE]
They key to trading news releases is to know what areas of the economy that the central banks are watching in order to make their next monetary policy move… For BoJ it’s inflation… For the US it’s jobs… For the UK it was the GDP… All of these are dynamic and change with the economy… Start viewing it as “What are the central banks watching”… These are the ones that provide the biggest moves as they are the most important in determining the monetary policy stance.
News trading isn’t that bad, providing the trader knows what she/he is doing. News trading isn’t for the faint-hearted, and the inexperienced. So you must have a killer strategy at hand, including effective risk control measures. Many run away from news trading without knowing that events rule the markets.
you must add news plus your own strategy, try to visit forexfactory they have lots of key economic indicators there…
Trading the news can really be profitable or down right costly. I’ve learned my lesson, I’ve both profited at it and lost some at the same time. I’ll be staying away from news until I get comfy with it.
I agree, each currency has its own market mover. As for EurUsd (or Xau) I believe that the statements by the Fed represent the main factor of volatility at the moment.
It makes sense from your point of view. Actually, now news is safe to trade because the way the market respond to news is not static.
There are some bots that trade minor news results for quite decent results - brokers tend to widen spreads a lot for the major releases so its always difficult to reliably trade them.