The Forex Trading Market
When trading Forex, a great bonus is the fact that the market is open 24 hours a day for five days a week. The fact that the market is open for such an extended period of time means that it responds to worldwide news as it breaks. And it’s not just the U.S economic news either – the trading is affected by all kinds of news from across the globe.
The Economic Data Releases
Given the fact that there are at least eight large currencies that most brokers have available to trade, as well as over 17 different derivatives, there is always some sort of economic data scheduled for release. Traders can then use this data to inform them of how best to proceed with their exchanges. There are usually at least seven data items that are released each day from the eight majors. So, if you trade news, opportunities are plentiful. For this reason trading new has become very popular among the traders. Let’s have a look at when the different economic news items are released and how Forex traders can make the most of the data.
Different Data Releases Have Greater Significance than Others
Given that The U.S. Dollar (USD) is on one side of the trades in over 90% of major currency pairs, it’s not difficult to imagine how the economic releases in the US usually have the biggest impact on the trading market.
If you follow news trading, you will need to pay close attention to the market at the times when the most important releases are made. The U.S. releases its data between 8.30-10.00am (EST) whereas Japan’s is 6.50-11.30pm (EST). The UK’s is in the early hours of the morning between 2:00-4:30am (at least, if you’re operating on Eastern Standard Time – for Greenwich Mean Time, add on 5 hours to the stated times).
Key Data Releases
These key data releases include information such as a decision about the interest rate, retail sales, inflation rates, unemployment figures, industrial production information, business sentiment surveys, consumer confidence surveys, trade balances and surveys in the manufacturing industry. The importance of each of these different releases is dependent on the country’s current economic state. You also need to be mindful of the fact that trading news doesn’t just last for a few hours or a day. The effect of a release may have far reaching effects on the market for several days or even a week. The key, when trading Forex, is knowing when the releases are, and exactly which ones are important.