Making Sense of the Mass of Forex News
In this weekly video:
00:26 – Trader from Russia says the news is confusing
00:55 – A Fundamental trader or a Technical Trader
01:35 – Real time examples
02:18 – The news impact is likely to be very low
03:28 – Simplify your trading and don’t worry about the news events
How can you trade Forex realistically when there's so much happening in the news around the world on a day-by-day basis? Let's talk about that and more right now.
Hey, traders. Andrew Mitchem here, the owner of the Forex Trading Coach with video and podcast number 313.
Trader from Russia says the news is confusing
I want to explain about an email that I've had sent to me from a trader in Russia, and he said to me. He said, “Andrew, I can't trade Forex because it's too much to consider. It involves two countries with their politics affecting currencies and so many things going on in those currencies that it is impossible to keep up with everything. Can you help me?” The short answer is, “Absolutely. Yes.”
A Fundamental trader or a Technical Trader
When you think about it, as traders, you've got two different options. You can either go to be a fundamental trader or technical trader, so as a fundamental trader, you're really concerned with news events, and what the event is, and what the impact is on the currency. Things like that, and you see a lot of images online of people watching TV screens, and news channels, and all those type of things.
My simple advice to you is to ignore that and ignore most of that inclination because quite honestly, you don't need it. My suggestion is that you look at Forex Factory at beginning of the week and maybe on each day, and just have a look at the high impact news announcements.
Real time examples
To give you an example of how little there is actually happening there in the market, today, Friday, the 15th of March, 2019, if you have a look on Forex Factory, there are only three high-impact news announcements for today scheduled for Friday. All three of them affect the Japanese Yen.
Now, the likelihood of them actually making any significant movement in the Japanese Yen is quite … probably quite small. The likelihood of it happening is quite small, and even if it does affect the Yen, how is that really going to affect you if you're trading other currencies or even if you're trading the Yen? It's likely not to affect you because if you're a technical trader like I am and as I teach, it's all factored into the charts anyway.
The news impact is likely to be very low
But let's say you are trading pick a currency, the Canadian against the Swiss Franc, let's say, or even the Euro, US.
The impact of that Japanese Yen, those three high-impact news announcements for today, it's not going to affect you so it really doesn't matter. Yes, it's nice to know what's happening in Japan or what's happening in different countries, but when you think about it, as a trader, even if you focused on that and just understood what was happening, is the news good or bad, just to get a gauge on what's happening, you've only got eight main currencies anyway. It's not like you're sort of looking at them, stocks and shares, and worrying about different companies and what is happening with different boards, and chairmans, and dividens, and all those type of things. It's happening all the time with thousands and thousands of companies.
We're just talking eight currencies, so really, it's very, very easy to do in fact, and you haven't got to worry about those big events, and as I mentioned, when it comes to the way that we trade, the news announcements don't affect us anyway. It's all taken into account, and the charts tell you everything that you need to know.
Simplify your trading and don’t worry about the news events
So I hope that helps. Simplify your life. Simplify your trading. Don't make it difficult. Don't get too confused by it. At the end of the day, you find the currency pair that's showing you the good technical setup. It doesn't really matter what the pair is. I live in New Zealand. Do I trade the New Zealand Dollar day after day? No. It doesn't matter. If the New Zealand Dollar is showing a good trade setup against say like the US, or the Yen, or the Franc, or Canadian, or the Aussie, absolutely I'll trade it, but it doesn't matter about where you live or what currencies are having news events. It doesn't really matter. Trade what the charts are telling you. Technical trading will make your life a lot easier and your trading a lot more profitable.
So, once again, this Andrew Mitchem from the Forex Trading Coach. I see you this time next week. Bye for now.