News Releases To Trade

Which News Releases Should You Trade?

We have to look at which news events are even worth trading, before we even look at strategies for trading news events.

Keep in mind  that we are trading the news because of its skill to upsurge unpredictability in the short term, so as expected we would only like to trade news that has the best forex market moving possible.

Although the markets respond to most economic news from numerous countries, the largest movers and most viewed news comes from the U.S.

It is because the U.S. has the biggest economy in the world and the U.S. Dollar is the world’s reserve currency. Which means that the U.S. Dollar is a participant in approximately 90 percent of all forex transactions, that makes U.S. news and data essential to watch.

Having said that, let’s check at some of the most volatile news for the U.S.

Additionally to inflation reports and central bank talks, you should also give attention to geo political news such as war, natural disasters, political unrest, and elections. Although these may not have a big impact as the other news, it’s still worth giving attention to them.

Also, pay attention on moves in the stock market. There are times where sentiment in the equity markets will be the sign to major moves in the forex market.

Now that we know which news events make the most moves, the next step will be to determine which currency pairs are worth trading.

For the reason that news can bring increased to unpredictability in the forex market and other trading opportunities, it is essential that we trade currencies that are liquid. Liquid currency pairs give us a guarantee that our orders will be executed efficiently and without any “hiccups”.

1.    EUR/USD

2.    GBP/USD

3.    USD/JPY

4.    USD/CHF

5.    USD/CAD

6.    AUD/USD

You will notice that these are all major currency pairs!

Keep in mind,  because they have the most liquidity, majors pairs generally have the tightest spreads. Since spreads broaden when news reports come out, it makes sense to stick with those pairs that have the tightest spreads to start with.

Now that we know already which news events and currency pairs to trade, let’s take a look at some methods to trading the news.

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