Why do People Analyse News?

Have been pyramiding into NatGas since Russia walked into the Ukraine… Who supplies Europe with 80% of it’s heating gas??.. What could go wrong?

Was already in an uptrend across the middle of the Northern Hemispheric winter…

This video will hopefully make you think about why…

People analyse news because they need to determine whether they are going to sell or buy a currency pair. Although index charts and other tools can determine the rate of a currency pair at the current time, what news does is - it shows the factors that will or might affect the forex market. For example - news such as a war in any country, a crisis or famine in a nation, or a new international industrial project opening up in some country. All of this will affect the currency pairs in some time, probably within a day. Before the changes take place, news helps the trader predict the upcoming trend of a currency pair value, and make decisions according to it.

I feel analyzing the news is a very smart decision. Traders tend to find that to be much more relevant when it comes to deciding the factor in trading. Also, apart from trading, the news can be useful in our lives directly or indirectly because it allows us to be aware of what future course of action we can take accordingly.

You obviously have to aware of news especially day trading but nothing straight forward that why it works

People analyze news to remain in touch with the market volatility. So that they should be able to predict the next move that the forex pairs are about to take and can trade keeping in mind the same thing. With the help of this news strategy, only traders would know when to open or close the position this way.

We all know very well that forex trading is based on various factors all around the world. So, a little change in any sector causes fluctuation in the market. Therefore, people analyse news to determine the market’s trend.

News is important in forex trading as traders who analyse and follow economic news are able to assess its effect on interest rates and monetary policies. Generally, hawkish news tends to push forex pairs up in comparison to other currencies whereas dovish news results in depreciation. Market events like FOMC announcements, economic data releases and earnings from the reports of major companies should always be kept in check.

Analysing news is really helpful to stay updated about the global economic events and learn about their impact on the forex market. This will help a trader to avoid taking up trades that will result in losses. When there is some sensitive situation going on between countries such as war, currency rates tend to fluctuate a lot and if a trader doesn’t get prepared for that they might end up losing a lot of money. So I will say it is better to stay updated with news as ignorance is not bliss when it comes to forex trading.

Economic news will affect the fundamental aspect of forex so it’s a good thing to understand and analyze the important one. Trading economic news like NFP is also a good opportunity to make a profit as it often creates a huge short-term market movement when the news hit.

trading doesn’t exist out of context. as simple as that.
with news you can predict the market-movements. if not predict - then at least be aware of them.

Analysing the news helps traders choose a good strategy to avoid certain risks and losses. It is good to analyse news since the economic releases have a pronounced impact on the forex market.

Analysing news is just a pastime. the actual work in trading should be analysing the charts.

Unless of course you can predict the news. Now that would be a really useful skill.

News analysis is crucial for forex trading. Simply watching the news might not help you that much unless you scrutinise and study it. When you research the news, this analysis helps you interpret it and connect to the forex market. News analysis is as important as signals and price action indicators to determine the future market movements.

Perhaps you can give an example or two?

There are many reasons why people choose to analyse news when they are trading forex. For some, it is a way to get an edge on the market. They believe that by understanding the news and its impact on the market, they can make more informed decisions about their trades.
Others use news analysis as a way to confirm their own analysis of the market. By looking at how the market reacts to news, they can validate their own understanding of the market and the direction it is moving in.

I agree with what you say about back-testing. It’s a contradiction - the retail trader won’t factor in news events. I personally belive technicals control the movements on the chart 95% of the time. Big news stories will either take over from tevhnicals for a short time period or give a directional push to markets in flux. I think most technical traders don’t like big news stories - unless you’ve got inside knowledge or are part of the story / high up in politics, then I’m certainly not smart enough to know which way the markets will go cos I don’t know what the result of the story will be (Brexit vote etc). It does make me wonder about the motivation behind political choices like the constant heating up and cooling down of the trade war with China a year or so back…

What people?

Most traders I know just stay out during news like NFP, CPI, etc …

They don’t “analyse” anything.

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The fundamental ( news ) traders are the most stupid type of traders that exists, at least most of them, they can’t see the obvious, and that is that news are just pure market manipulation, its smart money taking the opportunity to buy or sell, there are only two situations where the news might make a substancial move in one direction, one, is when they are done accumulating, and they will push in one direction continuing to buy or sell, and they will just keep buying or selling and pushing the price higher or lower, those are the times when you either get in or you will stay out of the market and miss the move. You can’t know when this will happen or what news will trigger these moves. I have seen NFP moving the markets hundreds of pips and i have seen NFP move the market 20 pips, the same for other releases/news. The second situation is news that ou can’t or will be hard to predict, like the coronavirus, some catástrofe, a terrorist attack, things like these. Moves are planned for weeks or months, they are accumulating and they won’t change their mind based on a news release, they are already planning way ahead, if you see a report with bad numbers for a currency, they had already predicted that, they have already predicted most of what the fundamental traders are looking in today, and they already decided the long term direction probably months ago.

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I tend to agree with @TP89 . When I was new to trading I didn’t really take it seriously when people talked about market manipulation, however, with experience I’ve realised that it’s an unfair world out there and have become quite alot more cynical… Now, as @averied says, I tend to try to stay out or hedge heavily when a big news story is about to break. Incidentally, the only news that I ever bet heavily on and won was the drop in markets with coronavirus - I just couldn’t see any other logical outcome. Even then, I stayed out of forex (March 20) and moved into indices (shorted the FTSE100).

People analyze new to gain a thorough understanding of the market and then implement trading strategies accordingly.