NOT NEW FOREX TRADING
01 / April / 22
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Thanks to the constant development of the Internet and means of communication, for traders who trade Forex via the Internet, information is becoming more accessible. Therefore, many traders, as well as investors, often believe that by watching the latest news, analytical reviews and other information, they increase their chances of making a profit. But this is not quite true. A high bet on the news can lead to large financial losses. Why is this happening?
Without a detailed examination of this issue, the real reason will be difficult to understand. Therefore, we will conduct a more detailed analysis: Almost every novice trader thinks that the use of news in trading will definitely benefit, but this opinion is wrong. It is believed that the news fully reflects the changes in the market under their influence. However, as a rule, this opinion is not supported by anything, and the reaction of the currency to them in most cases is very different from expected. Of course, the leading provisions on supply and demand do not go unnoticed by the market, at the same time there is no logic in their movement. The path taken by the currency pair can be determined by the following formula - "the main principles of supply and demand + investor psychology = market movement." As for investors, the determining factor here is their (in this case, they mean traders) reaction to the news, not the importance of this news.
The main reason that devalues the news is the markets themselves. For this reason, news trading becomes virtually unrealistic. So, knowing in advance when this or that news will come out and about what impact it can have on the market, investors start acting before its publication. And so, when this news comes out, the market's reaction to it is either barely noticeable, or none at all, as everything is already taken into account by the price. We must also not forget about the character of people, which shows the real picture of the importance of the news. Another reason that influences trade in the news is human emotions, which violate an important point in trade - discipline.
And analytics is also not always true. In situations where it would be desirable to close open trades, the trader will not do so, because according to analysts is about to follow the promised big move. With all this, the news should not be ignored at all. It is a well-known fact that market highs often appear after news with optimistic forecasts, and lows, on the contrary, after unpromising news. To sum up. For traders who do not have large funds, trading in major pairs, the right decision would be not to use news trading, and instead use a disciplined trading system. For the reason that all this news is already taken into account by the system. They are also included in the technical analysis, which is a mandatory part of any competent trading system.
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