Is monitoring trading news valuable for Forex trading?

The impact of trading news on the Forex market cannot be ignored. Read our guide to monitoring related news and making the right trading decisions.

Even if you claim to be only a technical Forex trader, everyone experiences trading impulses that are caused by news. While we firmly believe you need to be at least 75% technical, the news will provide volume to reach targets.

This advantage is why understanding the structure of fundamentals and how the news affects the markets will be a major factor in your trading success.

When is the news released?

As we know, the Forex market operates 24 hours per day, 5 days per week. Through the different time-zones, the economic data will fluctuate and affect price and movement.

Usually, the most common times to look for trading news releases on the majors are:

  • USD: 8 AM – 10 AM EST
  • GBP: 2 AM – 5 AM EST
  • EUR: 2 AM – 6 AM EST
  • AUD: 5 PM – 8 PM EST

But, as previously mentioned, these news announcements can affect different currencies throughout the day. Look during the times of volume on any news-related site.

What trading news should I focus on?

The most important trading news for Forex traders on which to focus is interest rates. These decisions will affect each country and will usually provide the trading tone for the day following the news.

Other trading news to focus on includes retail sales and unemployment figures. The most well-known news announcement, taking place on the first Friday of each month, is the NFP (Non-farm payrolls). It provides a huge volume of information from the employment figures.

Some Forex traders may even avoid trading during the hours between 1 PM and 3 PM (UK time) due to the sheer amount of volume and liquidity that is pumped through the pairs.

There are also the more commercial-based announcements that cover Inflation, Production, Business Sentiment, as well as Trade and Manufacturing. It is unlikely that you will need to follow every piece of news. Just keep in mind what news is relevant to the currency you are trading at that time. As traders, it is important to have some volume, but not too much where it can get messy with stop losses.

How long will the effect of the data and trading news last?

Most major news has an instant effect on the Forex market, that will usually last a couple of hours. Other trading news may emerge months after its relevance, for example, the GDP quarterly figures. Despite their temporality, when those figures are eventually released, there may be an instant decrease on volume prices.

Trading news conclusion

When it comes to trading in accordance with the news, most traders will look for obvious movements of consolidation and breakout patterns to catch any large market movements. You may also find spreads will widen at certain times, usually a sign of volatility.

It is important to keep your trading style up-to-date with some of the financial news, but also maintain a solid technical understanding of your key levels. If your chart analysis is effective, the news will help push the price to your targets.


FTUK Funded Account Disclaimer

CFTC Rule 4.41 – Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, because the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs, in general, are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.

All our funded accounts come with a fixed equity stop out level. Once the account equity level gets below this fixed stop out bar, we will close all running trades and disable trading and access. The stop out level is a fixed value for each funding level, this means that any profit which has been made by the trader increases the loss allowance.

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