Last update 2121.01.18
✍️ You may have heard many people saying that looking at the news is a waste of time to profit from price fluctuations, right? Perhaps you have already suffered this on the skin:
For example, good news comes out (in theory), you buy betting on improvement, and the market goes down, leaving you frustrated and at a loss. Due to the instability of the current world political scenario, reading the news to try to profit from forex has become an increasingly laborious task.
The news undoubtedly impacts the prices of currency pairs, but several aspects must be taken into account before we categorically state whether they work or not to generate profitable opportunities.
“As a result, all pairs with CAD as the quote currency have declined (like USD / CAD) and all pairs with CAD as the base currency have risen (like CAD / JPY),” he explains.
Read on to learn more about the impact of journalism on the forex market:
🧠 Understand how news can impact the financial market
Before looking at the American scenario and understanding how the situation there may impact our stock market and economy, we need to understand how news, in general, can affect the forex market.
Yes, the news impacts prices, but other aspects need to be taken into account before we can say if they work, and how they work. Yet, the extent to which news from another country is capable of truly changing our scenario.
More clearly for the trader to understand good news has come out, for example, and you buy by betting on that asset’s high. The forex market does not react as it should, and you have no idea why?
With a troubled political scenario in the United States, reading the news and trying to profit from operations has become an increasingly difficult task. But we simplify for you!
💡Find out what’s behind asset prices
The first thing we need to evaluate before discussing how the news impacts the price of a currency pair, especially in the American forex market, is to know how the market prices these pairs.
What is behind the pricing of a currency pair in the forex, is basically the expected value of that asset in the short, medium, and long term.
In stocks, for example, large market investors project the company’s revenues, investments, costs, and all other results. They bring all this flow to present value and arrive at what would be the estimated price of that share.
However, the estimated price is different from the price negotiated on the market. This is the difference in price and value.
Think that any news that shows some uncertainty in the future of the company, for example, can shake the prospect of value, so it affects the price. Thus, players understand that that action is worthless or more than it was previously worth. That is why after bad news, the price of a currency pair in forex can plummet.
Basically, not every expectation of the value of a currency pair in the forex is priced. At this point, the news appears that can effectively rock the market and others that are just ordinary news, which was already priced, as we will see a little later.
📃 Meet the 3 Types of News
News is information that becomes public. We can separate them into 3 very simple types to understand. This can help you to see if it can, or what can impact the forex or financial market in general.
These are the market indicators. These are the news that the date and time of publication are known by participants in the forex market. Do you know the disclosure of GDP, important indicators such as Payroll, and interest rates? They are all on this list. The players already know that the news will come out, but there is always an expectation to know if the data will match the previous ones.
These are the public opinions of people, such as economists, journalists, analysts, and politicians. Opinion makers who impact the decisions of players in the forex market are considered. Twitter, for example, has become a source for the modern democracies in the modern market: a phrase is capable of changing players’ expectations about trade wars and international trade.
These are the news that no one expects. For example, federal police operations, the sale of a company that no one was expecting, a terrorist attack, or some unexpected political event.
This type of news usually has the greatest impact on players. Due to the totally unexpected character, herd behavior is common in these cases, that is, “something happened, so we are all going to sell”.
Thus, Breaking News interferes with the risk aversion of forex market participants. That is why it is normal that, even though it is a rumor later disproved, at the exact moment of the release of this type of news, there is high volatility and asset prices change quickly.
🇱🇷 Why does American news matter to the trader?
In an extremely globalized world, we need to analyze the situation in the United States to determine the opportunities and threats that can impact our economy, and consequently, our stock exchange. The reflections there echo and influence the behavior of the entire market and our main assets.
They represent the biggest power in the world today, their news impacts not only our country but everyone else.
Find out the next news from the US that can make a big impact
The expectation is that the United States economy will slow down due to several factors: continuous years of growth, the slowdown in the world economy, and the impact of increases in the economy’s basic interest rate. It is worth remembering that, in practice, the higher the interest rate in the United States, the greater the flow of money to the North American country. All of this ends up harming emerging countries.
This increase, which is happening gradually, represents a kind of ripple effect, reducing the ability of companies to invest, increasing indebtedness, and reducing consumers’ purchasing power. The good news is that positive growth is still expected. That is why following the news, especially those pre-scheduled, become so important.
Now, analyze this scenario combined with political uncertainty: this is what the USA is achieving, for example, with the “bombs” news about the Trade War – or technological war, as it is already being called – All this points to a slowdown of the American economy, and causes investors a feeling of risk aversion. The world is in a bad mood. And the markets react negatively, falling.
🟡 Traders need to pay attention to the US economic agenda, as well as its impactful news. Everything can be reflected in your operations.
💸 Is that when the news is good, but the price of the currency pair has dropped?
One company announced very positive numbers on its quarterly balance sheet. Even so, the stock fell that day. What happened?
Sometimes, certain news is already incorporated in the price of a certain asset. Then comes the importance of understanding what is low impact news and what is a piece of high impact news.
Breaking News, on the other hand, generally has the power to generate more significant impacts on asset prices. The surprise effect means that players have to react at the same time. This generates a rush to the new equilibrium price.
How can the trader profit from the news?
When Breaking News occurs, for example, there are some decisions that we need to make. If you are positioned, and the flow and the news come against you, you can consider zeroing out as soon as possible. Thus, it is possible to avoid large losses.
But everything ends up being based on the experience you have in the forex market. If you don’t have it, it is better to stay out and act only on the simulation account, to train at times like this.
Now, if you have experience and have been operating for some time, it is the perfect opportunity to make money from the forex market, taking advantage of its flow.
The most experienced trader has tape reading as his greatest ally. Keeping up with the level of aggression in the forex market becomes essential for any day trader who wants to profit in the forex market.
The greater the amount assaulted, the greater the urgency to execute the order, and the greater and the urgency of this player about any event or news that will impact the forex market.
Thus, it is easy to see that not all participants have access to the same information. So, flow analysis can help traders a lot, because they can keep up with what big players are doing.
Their sensitivity to the normal movements, or not, of advancement or correction of the forex market; you will be able to capture with greater assertiveness the moment someone sets up a great position.
📻 Journalism itself!
Radios, newspapers, televisions, and websites are full of journalistic content. Despite this continuous coexistence, do you really know what journalism is and what is your role in society? And besides, what is the impact of journalism on the forex market? Come here that Wiseinvest explains to you!
What is journalism and where did it come from?
Journalism appeared in the world around the 17th century, as a consequence of Gutenberg’s invention, the movable type press, which was used to initiate mass printing. The innovative technique, together with the formation of nation-states (countries), started periodical publications known as newspapers.
In the first phase of journalism (1789-1830), political flags were raised, and the content could be considered political and literary, being very difficult to differentiate between fact and opinion.
Journalism can always be understood by the phrase of businessman William Randolph Hearst: “Journalism is to publish everything that someone does not want to be published. Everything else is advertising”.
Therefore, a professional journalist needs to understand what his responsibilities are in society and his representativeness in conducting something, or even its impact in the world of the economy, such as in the Forex market.
⚖️ Important to know: Journalistic Ethics
A Code of Ethics is an agreement that establishes the rights and duties of a professional category. By breaking this principle, a journalist will in turn break the trust of viewers or readers. These violations can tarnish a journalist’s reputation for being a reliable source of news and can lose the trust of the public.
Besides, the code also makes it clear that the journalist’s fundamental commitment is to the truth of the facts and that he should not be guided by individual interests. Therefore, the journalist’s role is to bring accurate information of public interest to the population.
A smart curiosity: Does journalism strengthen a democracy?
The answer is yes! Oswaldo Martins Estanislau do Amaral, a political scientist, and professor at the State University of Campinas (Unicamp), in Brazil, says that: “There is no democracy without freedom of the press”.
For the profession to be fully exercised, it is necessary that professionals can act in a free and democratic manner. That is, being able to exercise criticism and questioning concerning the government and the current public policies.
For this reason, it is also expressed in most Codes of Ethics, that the journalist should not agree with the practice of persecution or discrimination for social, political, religious, racial, sex, and sexual orientation reasons.
It is important to remember that UNESCO promotes freedom of expression and freedom of the press as a basic human right.
How to invest with AI from home
You can invest with AI in forex while performing your personal activities at home or wherever you are and save time. It is simple, safe, and free.
Check out the 3 steps to trade automated with Wiseinvest’s automated AI trading system.
By trading forex automated with AI, you will save time and improve your performance without monitoring the market and managing trading platforms.
With Automated AI trading you do not need MT4 / MT5 and other trading platforms to invest in forex. All forex trades are automatically placed into your broker account every time that our AI system identifies a new worthy trading opportunity. You can monitor the AI trading performance in real-time directly on our dashboard.
Benefits of Automated AI trading
- Invest in forex from just $100.
- It is automatic, time-saving, and safe.
- An annualized average return of +42%* over the past 10 years.
- Setup in 3 minutes.
- Totally hands-free, from anywhere.
- Integrated with the forex best brokers.
- Your capital is protected by the brokers.
- Test with a risk-free practice account.
- Up to 60 trades per month.
- Automatic trades on average every 12 hours.
- You have full control of your broker account.
- Fast execution of trades.
- No commissions, no management fees.
- Automatic risk-management with low trading exposure of your capital (0.10% up to 0.65% per trade).
- No MT4/MT5 or other platforms required.
- Portfolio with 40 different automatic strategies.
- Trading results directly on our dashboard.
- Optional free forex signals.
- Trading alerts by email and Telegram.
- We have a team of professionals to support you.
Don’t you have a broker account yet? Our AI is integrated to trade automated with the broker FXCM. Click here to open an account with FXCM, which is one of the best forex brokers in the world.
What does happen after linking a broker account with AI trading?
- The AI will automatically invest on average every 12 hours in your account.
- There will be up to 60 trades per month (Monday – Friday).
- You can enable and disable AI whenever you want.
- Check your trades on our dashboard or the brokerage.
- You can link more than one broker at the same time.
- You don’t need MT4 / MT5. It’s all on our dashboard.
- Your capital is protected under the broker.
- Your personal data is protected by us.
Would you like to try our automated AI trading for free in a risk-free demo account? Get started free here.
How much do I need to trade forex with AI?
You can start in forex trading with free AI forex signals or AI trading from just $100 through some of the best forex brokers. It is moreover possible to test using a risk-free demo account with our AI trading structure. Regardless, to do a capable peril, the board in authentic records, we suggest you start from at least $100.
What is the best forex broker to use AI trading?
- Where are you from? FXCM accepts accounts from some countries, but does not accept forex trading accounts from the USA.
- How much do you have? FXCM is ideal if you start at least $100.
- FXCM sometimes provides higher liquidity volume and lower spreads than other brokers, which are vital aspects of the success in forex trading. But it can also vary.
Why trust Wiseinvest instead of other trading platforms
These are the main reasons why forex traders at all levels trust us, rather than other trading solutions.
- Our automated AI trading is efficient, simple, safe, and affordable. You do not need MT4 or other complicated platforms to trade forex.
- We are a legitimate and reliable company with extensive experience in finance. We combine 19 years of trading experience and extensive academic research in the financial markets.
- Our AI outperformed the investment market with an average annual return of 43% over the past 10 years (2011-2020).
- The automated AI trading works with some of the best forex brokers.
- When using our AI solutions, all your money is protected by brokerage firms.
- We do not have access to withdrawals from our customers’ accounts.
- All of your data is encrypted and will never be shared.
Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.
The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. FXCM warns that 74.74% of retail forex traders lose money trading CFDs.
The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.