forex news trading is speculating on how the market will respond to the announcement of major news stories or the release of market data. Whenever major news is released, the market will invariably respond. The question is whether the market will rise or decline based on the news. Many traders will trade based on their belief on how the market will respond. There is only one question that can be asked about news trading. Does Forex news trading really work?
Most markets will have slight movement preceding the announcement of major news events that are regularly scheduled. These events might be the release of market indicators or unemployment numbers. This is because there will be rumors about what the actual numbers to be released will be like. Traders will then place a position based on how they feel the market will respond if these rumors are true.
The Forex market place is open for trading 24 hours a day. Any news announcement in any country during the day or night will immediately have an impact on the currency market. Usually the market will have a slight change just prior to the news announcement and then the market will have a greater change after the news announcement.
With Forex news trading a trader is basically trying to speculate on the impact of the news announcement. There is no question that major news announcements can have a profound impact on the Forex market place. This is why most Forex traders will try to capitalize on the release of major news announcements.