forex news trading strategy
One of the most important trading strategies is the forex news trading strategy. The most common way to trade forex on news is to look for a period of consolidation ahead of a big number and trade the breakout on the back of the number. A variety of exotic options are available for traders who want to capture a breakout move, but with less volatility than trading the currency pair itself.Generally speaking, forex traders can look at economic news to assess its impact on interest rates and monetary policy. News that suggests a more hawkish (aggressive) central bank tends to push forex pairs up in value relative to other currencies, while dovish (peaceful) news can cause a currency to depreciate.
What is a fundamental strategy?
Fundamental trading is a method where a trader focuses on company-specific events to determine which stock to buy and when to buy it. Trading on fundamentals is more closely associated with a buy-and-hold strategy rather than short-term trading. Fundamental analysis is a way of looking at the forex market by analyzing economic, social, and political forces that may affect currency prices. … The idea behind this type of analysis is that if a country’s current or future economic outlook is good, its currency should strengthen.
