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USING THE NEWS

 

When are these indicators published?

 

There is a fixed schedule for publishing the news in these economic reports. Although you might be able to guess when this is by observing the peak trading activity during the different days of the week, a more reliable source of information is for example the New York Federal Reserve web site.

 

What’s the best way to use the news?

 

With news releases, it may be tempting to react immediately to try to take advantage before others do, but a moment or two of reflection may pay dividends.

 

On the one hand, news that contrasts with what the general opinion was up till then may open up new trading opportunities. On the other hand, the information also needs to be relevant to the key aspects or issues involving a country. For example, for a country doing well on employment but struggling to contain inflation, a report citing lowest ever unemployment may not have as much impact as one that demonstrates that inflation has fallen to a single figure.

 

How do you stay safe when the news hits trading?

 

News releases can trigger currency rate changes of hundreds of pips in a matter of seconds. Whether you want to stay safe or try to profit from the situation is a matter of doing your homework beforehand. Simply to stay safe, your homework is to find out when the key reports arrive and quite possibly to suspend your trading during the periods just before and just after.

 

On the other hand, if you want to continue trading during those periods, then not only should you know the timetable of the news and reports releases, but you should also be prepared with one strategy to trade in the case where the news confirms what traders were expecting, and another strategy for trading if the news says the opposite of what traders were expecting.