eToro – Forex Trading Forum

[MannieNL]

How do I know which kind of economic news will defintely affect currencies I'm trading in?
You can read all economic news, but I believe some are less effective on the currency market than the other. How can I learn how to selectively read news and on which news should I definitely focus?

[BlueinGreen]

Hey

I am trying to post every day the main events for that day, the ones which I think will have the highest impact on the market - you can see it in the “news forum “(it goes by date).

Generally we can tell forehand which events will have little affect on the forex market, and which events are likely to have a considerable affect on the forex market , so we can be ready before a major announcement.

What we do not know is the result of each and every report. The result is what actually moves the market, and not the fact that there is an important report on the way.

For example : there is an unimportant event today at 1:00pm we expect the numbers to be around 1.5% but the numbers came out much much better than expected at 5%
So now the “unimportant event” has turned into a market mover in a matter of minutes !!
The same goes when a very important news report is turning out exactly as expected – sometime the market will not move much even when it is a very important report.


This is something we can not forecast – we have to be there at the time the news are out.

The most important thing is to know which events are likely to affect the market and to react according to the results in a smart way – low risk & high reward

[yesman]

low risk & high reward ?

[MannieNL]

What we do not know is the result of each and every report. The result is what actually moves the market, and not the fact that there is an important report on the way.

For example : there is an unimportant event today at 1:00pm we expect the numbers to be around 1.5% but the numbers came out much much better than expected at 5%
So now the “unimportant event” has turned into a market mover in a matter of minutes !!
The same goes when a very important news report is turning out exactly as expected – sometime the market will not move much even when it is a very important report.

That makes the market interesting I believe. If everything would be so predictable it's boring to watch the charts ;)

This is something we can not forecast – we have to be there at the time the news are out.

The most important thing is to know which events are likely to affect the market and to react according to the results in a smart way – low risk & high reward

Did it ever happen to you that you failed to react properly to a sudden move of the market? Did you correct that then immediately? E.g. you see that the market moves the opposite direction as you expected; did you immediately sell the currency you were holding as a result of this or prayed for the better and let it move on hoping it would correct itself sometime? What's the smartest to do? Retreat or pray for a correction?

[BlueinGreen]

[]

Did it ever happen to you that you failed to react properly to a sudden move of the market? Did you correct that then immediately? E.g. you see that the market moves the opposite direction as you expected; did you immediately sell the currency you were holding as a result of this or prayed for the better and let it move on hoping it would correct itself sometime? What's the smartest to do? Retreat or pray for a correction?

of course it happened (and still does)
Trading Forex or any other security will never be 100% transparent. If someone is telling you he is able to predict the market all the time he is not telling the truth (or just plain crazy)

many times the market is doing something we do not expected to do, for example when a news report is coming out much better than expected and the currency is dropping in value instead of reacting positively to the market, there might be a reason for this action we do not know of, further more we do not know at the time how serious this reason can be, and how dip it can hurt our position.

The truth is – we can not know all the time every thing that is going on in the market.
but we can know most of what is going on, and we can try to base our judgment on what we know.

Personally- i will never enter a position before deciding where to get out in case the market will do the opposite of what i predicted. It is very important to do it before, since doing this decision while your position is already open and in loss is always mixed with emotional factors instead of purely rational factors.

Some traders move their stop loss many times until they realize they are losing much more than they ever thought they would loss on this one position.

just praying for the better instead of protecting your capital wouldn't be a good idea --- praying is a very bad tool to trade with..

[MannieNL]

[]

Did it ever happen to you that you failed to react properly to a sudden move of the market? Did you correct that then immediately? E.g. you see that the market moves the opposite direction as you expected; did you immediately sell the currency you were holding as a result of this or prayed for the better and let it move on hoping it would correct itself sometime? What's the smartest to do? Retreat or pray for a correction?

of course it happened (and still does)
Trading Forex or any other security will never be 100% transparent. If someone is telling you he is able to predict the market all the time he is not telling the truth (or just plain crazy)

many times the market is doing something we do not expected to do, for example when a news report is coming out much better than expected and the currency is dropping in value instead of reacting positively to the market, there might be a reason for this action we do not know of, further more we do not know at the time how serious this reason can be, and how dip it can hurt our position.

The truth is – we can not know all the time every thing that is going on in the market.
but we can know most of what is going on, and we can try to base our judgment on what we know.

Personally- i will never enter a position before deciding where to get out in case the market will do the opposite of what i predicted. It is very important to do it before, since doing this decision while your position is already open and in loss is always mixed with emotional factors instead of purely rational factors.

Some traders move their stop loss many times until they realize they are losing much more than they ever thought they would loss on this one position.

just praying for the better instead of protecting your capital wouldn't be a good idea --- praying is a very bad tool to trade with..

Thank you. This reply is very useful. Now only trying to find a way in finding the right spot to get out of the market when it will go the opposite direction of what i predicted...