Although all marketers are on pretty much the same page when it comes to it technical analysis, is not the same for fundamental news and analysis.
In this blog we review the two points of view related to the advantages of following the news when trading forex and, in the end, giving our two cents. So let’s go straight to it.
Argument against keeping up with the news
A main argument against this is that the news can be overwhelming and confused.
This effect is manifested in the way the market reacts to important news that is published. Often, when a major financial report is published, it can be observed that the market is going through a period of high volatility in which there is no clear direction. This is a dangerous time for trading and smart traders often choose to stay away from the computer right now just to join the market once a trend has formed.
This is the power of the news and the uncertainty it can cause. There are there are no set rules about how a financial market will react or react to a financial event. Traders have their theories and this is what causes confusion in the market because ultimately the creators of the markets are the banks and hedge funds.
Therefore, those who advise against following the news think that it is unnecessary stress and that technical indicators they are enough to help a trader make informed decisions with their operations.
Argument to keep up with the news
The argument against this is that sometimes news can help create trends or confirm a feeling as well.
The way it works is often when the file bulls and bears keep facing, a news item will confirm the vision of a band giving a clear indication of the fall or increase in the value of a currency.
This means that being aware of this series of events will benefit a trader because he can follow a trend at the right time and maximize his profits.
The other reason it helps to be aware of the news is because market makers are likely to react. Big banks even buy the news and have complete teams to analyze it and shape their business strategy.
This means that before important information is published, you can see the banks and mutual funds that are being prepared. If you analyze the market before important financial data is published, you will be able to decipher what the creators of the market think.
From these arguments it can be concluded that there are you can earn more by following the news than by ignoring it altogether.
If you are careful and observe the market closely, you will be able to know if you should participate or not, so that you can save yourself from being caught in any moment of confusion and avoid random volatility.
If you want, you can learn about important news sources here.
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