Forex Learning : The Forex movement has proven to be able to move quickly. Forex transactions offer many opportunities to get big profits on short-term trading because forex trading also depends on price fluctuations that only last a few minutes.
What should you pay attention to? And how should you react?
The currency market is very reactive to economic announcements, for example: after the announcement in September that the Federal Reserve will not tap off the quantitative easing program, making the dollar fall dramatically. This signal tells the bottom of the US economy that it still has to get support and send traders to transact into stronger currencies like GBP which caused a sharp breakout in GBP / USD.
Fluctuations like this are based on unusual news because most economic data announcements have a lower effect, but will always have an effect and provide opportunities for profit at the right time.
There are usually seven or more economic announcements on one day in major currency trading. For part-time traders, it is important to know which economic data to consider so that they can choose the currency to be traded.
The biggest economic announcement came from the United States because most currency trading was pegged to the dollar. In addition, the announcement of the British economy which has an effect is almost as important as Forex trading also occurs in London.
After the announcement, usually the currency will fluctuate randomly in the first 60-120 seconds before moving sharper.
Trends will become clear over a relatively longer period with the announcement market effect lasting between two to four days, but there will be a lot of up and down movements in the next day.
Use News and Limit Trading Time
Trading using news can be used by finding consolidation periods, short-term fluctuations before or after the announcement and trading breakouts.
Discipline is very important here, although short-term trading offers tremendous opportunities.
The Forex Market is open 24 hours a day, 5 days a week. You can’t stay awake for that long, so you need to choose the time to make a transaction. But the easiest is when prices are in one open market simultaneously. London and New York trading hours are the most widely traded.
Determine the time limit on trading because this will help you to minimize risk. Currency will continue to fluctuate amid news. Set a deadline, how long you will trade can help stop you from trading “hope” when prices move in the short term.
In addition, short-term currency transactions basically have a high risk. To minimize this, consider using stop orders.
Technical Analysis Help
Trading using news naturally will lead to technical analysis. Technical analysis will depend on graph analysis.
Understanding of technical patterns and trends on the Forex market and a combination of economic news will give traders greater insight when the market will move in the short term.
A market that moves in minutes or even seconds will make dramatic changes that occur considering the economic news that appears and will be a very important moment for a Forex trader to react quickly (also read about world economic news ).
The combination of fundamental analysis and technical analysis can be a path to successful transactions.