Its a fact that today is forex news sources are better than ever and its delivered quicker yet the ratio of losers to winners in forex trading remains the same as it did 50 years ago 95% lose and only 5% lose. The news can be useful but you need to know how to use it.
First lets look at a simple equation:
Forex Fundamentals (supply and demand news) + Investor Psychology = Price
The facts are there for all of us to see but assessing the impact of the news is hard because humans (millions of them) all motivated differently see the facts but they all draw their own personal conclusions from them and thats the price.
If it were easy to trade by following the news then there would be a lot more winners than there actually are. Will Rogers once said:
Exercise To Profit::
Forex Currency News on Your Site. Traders Talk. Free Forex Charts. Forex Links. Sundancer Resort activities provide a natural way to release tension in the
http://www.gracecheng.com/forex_trading/133/Exercise_To_Profit.htmlHOME |
I only believe what I see in the papers
Of course he was making a joke but I am amazed by how many traders think that because a story appears on Reuters or another newswire, they can trade it - you cant.
The fact is that humans always push prices top far up or down, as their emotions come into play and most major tops are formed when the news is most bullish and vice versa in a bear market.
Its a fact that prices generally move in line with the long term fundamentals but prices spike to far from fair value up or down along the way and history shows us these spikes dont last.
Forex Traders Education Articles Learn Currency Trading - 4 ::
need to be aware that 95% of traders lose - not because they dont put in the effort, its just they get the wrong Forex education.
http://www.fxtraders.eu/article.php?id=14515HOME |
You can spot them easily on a forex chart and trade them for profit.
There is a well know saying:
If you can hold onto your head when everyone around you is losing theirs, you probably havent heard the news
In forex trading this means you sit back in a detached fashion and look at your forex charts and when you see a price spike you start to question the news.
Money Management Matters::
A trader can be wrong 20 times in a row and still have 80% of his or her This is the most important reason why traders should use only their speculative
http://www.investopedia.com/articles/forex/06/FXMoneyMgmt.aspHOME |
For example - the euro spiked to 1.50 recently and everyone said that the dollar was finished - yet its rallied and will probably rally further.
Why?
Because all the news stories have been discounted: Interest rate cuts, the sub prime mortgage crisis, the US will slip into recession etc and things can only get better and people also didnt pay attention to GDP which is robust.
The dollar was simply oversold and rallied, when the news was at its most bearish.
This doesnt just happen in forex, it happens in any market.
I read a great story about oil going to $160.00 dollars a barrel and that $100.00 a barrel was sustainable.
Well - there is no shortage of oil.
Global demand is actually falling and the true value of oil is in the $70 - 80 region. When people said $100 a barrel was a forgone conclusion - it was time to sell.
The fact is we are not creatures of logic, we are creatures of emotion.
Humans are also pack animals, we like to be with the crowd and the news reflects this.
The facts are the crowd never wins.
If you look at a forex chart and you see a piece of bullish news that fails to rally a market or a bearish piece of news that doesnt cause a market to fall - that is telling you to look at your charts and look for a contrary trade.
Forex news can be useful - but not in the way that many traders think.
The above are just a couple of examples, of how you can use forex news ( or any market news) to generate contrary trades, enjoy currency trading success and join the elite winning minority.
 Traditional University or MLM University? You Choose
 15 Questions to Ask Your Software Vendor
|
Forex News - Why Most Traders Use it in the Wrong Way and Lose!