What is Forex News Trading And Why Is It Important To You, As A Forex Trader? Knowledge to action forex peace army calendar News Trading, or Fundamental News Trading, is the primary driver of currency markets. Forex market is driven by high impact news events, and by understanding how to take advantage of these events, you can increase your profitability and avoid costly mistakes.
The key, of course, is the term Surprise. Forecast or Consensus: This is a figure derived from a survey of economists, usually done by news agencies such as Reuters or Bloomberg. This Forecast number, represents what the market expects the release to be. Previous or Past: This is the actual figure for the previous month. Sometimes market looks at the current Forecast versus the Previous release to gauge improvement. This figure is also important because sometimes we will get a revision, or modification of the past release, which could also surprise the market. Actual Release Figure: This is the actual release of the news from official sources.
If this figure is different from the Forecast number, then we have a Surprise that is definitely market moving. And News Trading takes advantages of this surprise. Of course, depending on the actual release, we could get a little surprise, or a HUGE SURPRISE. It all depends on the deviation, which is the difference between the actual release and the forecast figure. Deviation is simply the difference between the Actual and the Forecast figure. The deviation is determined by looking at historical data of the past five years.