Trading Forex economic events can be hard and tricky if you’re new to it. But it can be very profitable if you know what you’re doing. A lot of traders stay away from news events because of the high volatility which occurs during the release, this is often caused by other traders who are trying to decipher the event. When speeches are being made from huge banks such as federal bank or bank of England, the traders are listening carefully trying to decipher what the outcome is going to be.
Now for news indicators, its just a matter if you can afford to get the number before the market starts to react. All banks and big institutes around the world have access to government lockups and manages to get the number a couple seconds before it is released so they know the deviation, this is how the huge initial spikes occur right when a economic indicator is released. We all know that banks and huge institutes control how the market moves and this is how it happens. This really screwed over the small guys in Forex when they tried to trade news events, people were wondering how the market started to spike and move before the indicator was released.
That is why people got afraid of trading during news events and just stayed away for couple hours until everything settled back down, that is how the message ” stay away from the news ” was passed on I presume. Anyhow that didn’t stop some traders from experimenting techniques to help them trade these economic indicators. There are a few strategies that can be used to trade them, I have used them with success. Traders saw the huge potential of trading from these indicators and started to grow their accounts rapidly. Accounts were being doubled and tripled within a week or less. Forex brokers were wondering what is going on they were losing money left and right, and this is when they found out what was going on. The name going around for these traders were arbitrageurs, Forex brokers began to increase spreads and degrease execution speeds on trades entered around the news time.
Fortunately trading news indicators have not died out but it is very hard to find a Forex broker who will honor trading news. Some say they support trading the news but you still see wide spreads of up to 30pips!
You can check out financial news networks for live feed on the financial markets.