Forex Trading Strategies For Beginners06/26/12
There are plenty of strategies used for trading on Forex market and most of them require specific skills and experience. But some Forex Trading Strategies are quietly suitable for novices and can bring positive results at the beginning of trader’s career. One of such strategies is News Trading Strategy. You can try it on demo-account not get sure it works in current market conditions.
It is generally known that financial news can influence the market even if it is only an unproven rumor. A trader should be selective in the range of everyday news to use only those that give a very good start and causing significant currency rate move. This is one of the Forex Trading Strategies based on simple information analysis, when trader tracks news about the country whose currency he is going to trade. If you would like to deal with British Pound and US Dollar, track the UK and US financial news, including retail sales, GDP and PPI, trade in goods, real estate sales, export/import, etc.
Each week you need to receive Forex news calendar and point the news items that will be used for trading. You should track the situation on a market at least 5 minutes before the news publication. If the currency pare rate (like GBPUSD) remains stable during the specific time interval, most likely it will significantly change after the news will be published. However the move can be either up or down, it is more difficult to predict.
Using such Forex trading strategies like trading news, you should remember about cycles that consist of phases of high, middle and no reaction on financial news. The best news are unexpected ones, they stimulate the rate change up to 200 points at a time. If you catch the trend, you are able to get high profits from such currency exchanges. Trading news strategy is not often used by professional experienced traders, however it can serve as a good start point to understand how the exchange market is functioning and react to different changes.