Some things a Forex Trader needs to be aware of are news events. Any trader that has been suddenly caught in a whirlwind of volatility, spread, and slippage can warn you about the dangers of ignoring these events. The question many new traders have, however, is how does a trader stay on top of all the news events? And which ones are important?
Let’s focus first on how to find out about news events. An economic calendar can become an indispensable tool while trading forex. For Apiary Fund traders, we can sign onto our website, press the “More” tab, and select “Economic Calendar” from the drop down menu. Some other sites we encourage traders to become familiar with would be http://www.forexfactory.com/ and https://www.dailyfx.com/. These sites will also give traders an estimated impact/importance the event will have have in the market.
Take a look at an economic calendar at the beginning of the month and decide what your plan of action will be during each news event. You have a couple of options during news events, you could:
- Ignore the event (not suggested for any potentially major events)
- Trade the event (strongly discouraged; make sure you know the risks accompanying trading during news events)
- Close positions prior to event (highly encouraged, especially during the upcoming major event)
While on the subject of news...It might be time to acknowledge an event on everyone’s mind this week: the Brexit.
It seems like everybody in the world is focused on the Brexit, and trying to anticipate the outcome. Brexit supporters claim that membership in the EU is a net cost to the country and that they would be better off without the regulation and politics that come with EU membership. Those who oppose the Brexit argue that the benefits of belonging to the EU are 10 times the cost of staying in the club. Already we are seeing liquidity decrease and an uncertainty of currency value in anticipation of the vote on Thursday.
Our advice? Get up, turn on the computer, watch and learn from one of the largest planned risk events in over 40 years.