Market information tips
In the final part of our series on Fundamental Analysis for forex traders, we’ll be providing you with some advice on how to identify the most relevant market information and filter out the less important stuff.
The first thing you need to look out for is the timeliness of any reports you read. Even brand new reports can sometimes refer to data that was gathered some time ago, and that the market has already adjusted to via its influence on other, more timely reports. If the market has already made its move, however, you may still need to adjust your current strategy and thinking to factor this into account if you haven’t done so already.
In trading circles, there is a saying that goes “buy the rumour, sell the news”, and in many cases, it is the market rumour about economic data that can be more decisive than the actual report in determining the reaction to the release. Rumours about economic data can occur several minutes to several hours before data is released, and these can help to produce some short-term price moves as well as having a more lasting effect on market sentiment.
Who starts these rumours?
Large moves are often the result of institutional traders, who may feasibly have the inside track on these things, but with a market as decentralised as spot forex, there is no simple way to separate fact from fiction. All you can do as a trader is to have a good trading plan and react quickly once the rumours have been proven true or false.
One final thing to bear in mind is to know who is reporting the news. Is it an analyst, an economist, or a blogger? Could it be a central bank analyst? The more information-gathering you do for forex trading via the forex news and media, the more finance and currency professionals you’ll be exposed to.
What you also need to be able to do is discern whether they are giving their opinion, or a fact based on recently released dataAre they offering merely an opinion or a stated fact based on recently released data?
Basically, the more familiar with forex news you become, the more aware you will be of the agendas of those that report it, and what their analytical strengths and weaknesses are.
Other articles in this series:
Forex Trading Fundamental Analysis Masterclass Part 1
Forex Trading Fundamental Analysis Masterclass Part 2
Forex Trading Fundamental Analysis Masterclass Part 3
Forex Trading Fundamental Analysis Masterclass Part 4
Forex Trading Fundamental Analysis Masterclass Part 5
Forex Trading Fundamental Analysis Masterclass Part 6
Forex Trading Fundamental Analysis Masterclass Part 7
Forex Trading Fundamental Analysis Masterclass Part 8
Forex Trading Fundamental Analysis Masterclass Part 9
Forex Trading Fundamental Analysis Masterclass Part 10
Forex Trading Fundamental Analysis Masterclass Part 11
Forex Trading Fundamental Analysis Masterclass Part 12
Forex Trading Fundamental Analysis Masterclass Part 13
Forex Trading Fundamental Analysis Masterclass Part 14
Forex Trading Fundamental Analysis Masterclass Part 15
José Ricaurte Jaén is a professional trader and Guest Editor / community manager for tradersdna and its forum. With a Project Management Certification from FSU – Panama, José develops regularly in-house automated strategies for active traders and “know how” practices to maximize algo-trading opportunities. José’s background experience is in trading and investing, international management, marketing / communications, web, publishing and content working in initiatives with financial companies and non-profit organizations.
He has been working as senior Sales Trader of Guardian Trust FX, where he creates and manages multiple trading strategies for private and institutional investors. He worked also with FXStreet, FXDD Malta, ILQ, Saxo Bank, Markets.com and AVA FX as money manager and introducing broker.
Recently José Ricaurte has been creating, and co-managing a new trading academy in #LATAM.
During 2008 and 2012, he managed web / online marketing global plan of action for broker dealers in Panama. He created unique content and trading ideas for regional newspaper like Capital Financiero (Panamá), La República (Costa Rica), Sala de Inversión América (Latinoamérica) and co-developed financial TV segments with Capital TV.
He is a guest lecturer at Universidad Latina and Universidad Interamericana de Panamá an active speaker in conferences and other educational events and workshops in the region. José Ricaurte worked and collaborated with people such as Dustin Pass, Tom Flora, Orion Trust Services (Belize) and Principia Financial Group.
