What Makes The Forex Market Move?



It is the news that makes the forex market move.

It is never enough to only know about technical analysis when trading. It is also essential to know what makes the forex market move.

There is a fundamental force behind these and every movement. They called this force the news.

To understand the importance of the news, imagine this scenario, purely fictional of course!

Let’s put it this way,  on your evening news, there is a report that the largest software company that you have stocks with just filed bankruptcy.

To your surprised, what will be the first thing that you would do? How would your insight of this company change? How do you think other people’s opinions of this company would change?

The clear response would be that you would instantly sell off your shares. This would probably what everyone else who had any shares in that company would do.

The truth is that news affects the way we see and act on our trading decisions. It’s not different when it comes to trading currencies.

However, there is a distinct difference with how news is handled in the stock market and the forex market.

Let’s go back to our example above and visualize that you heard that same report of the largest software firm filing bankruptcy, however,  let’s say you heard the report a day before it was actually broadcasted in the news.

Obviously you would sell off all your shares, and as a outcome of you hearing the news a day earlier, you would make  more money than everyone else who heard it on their nightly news.

Sounds good for you, right? Unfortunately this little trick is called  Insider Trading, and it would have you thrown in jail.

In the forex market, it’s called Fair Game! However, In the stock market, when you hear news before everyone else it is illegal.

The earlier you hear or see the news, the better it is for your trading, and there is absolutely no penalty for it!

“Add on some technology and the power of instant communication, and what you have is the latest and greatest (or not so greatest) news at the tip of your fingers.”

This is good, “news” for retail traders because it permits U.S. to react fairly quickly to the market’s speculations.

Small traders, big traders, husky traders, or skinny traders all have to rest on the same news to make the market move for the reason that if there was not any news, the market would hardly move at all!

The news is essential  to the forex market because it is the news that makes it change. Despite of the technicals, news is the energy that keeps the forex market going!

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