How Forex Trading News Can Wreck Your Trades

Currency trading news gives some traders the data that they need to make a lot of money with day trading or scalping techiques but for others it just appears to cause a giant wreck. The spikes that can occur in currency values round the time of forex trading reports press releases look like they should offer great potential for money so what goes pear shaped? Here are 3 things that will have you trapped in a losing trade. take a look at your broker’s conditions if you need to trade around reports announcements. Some will mechanically close your currency trades at times of high volatility. Others will not allow you to open a new trade. Many brokers will increase the spread at these times and you may not be told by how much. With some market makers you can experience significant slippage even in comparatively stable times. Round the time of a foreign exchange trading news release it is even more likely as the price can change in the split second between you seeing it on screen and clicking a button. The same is applicable to stop and limit orders : you’re much less likely to get the price you expected at these times. This will mean that a system that worked well on back tests has totally different ends in real time.

Currency Exchange Brokers Explained

By Forex Automator Pro

Most forex brokers offering accounts to retail traders operate in one of two ways. More likely, you’ll be having a look at either an ECN broker or a market maker. ECN forex brokers use the Electronic Communication Network, a world online marketplace that caters for many different types of trader from retail to the gigantic banks and market makers. ECN brokers are often better for scalpers and will even welcome them because they’re dealing at once with a gigantic market. Slippage is not so much of a problem either for scalping or at times of currency exchange reports reports. They’re also often well controlled. On the other hand, the variable spread can suggest more doubt when setting stop losses and limit orders. ECN brokers also have a tendency to offer fewer charts and may have a less user friendly trading platform because they aren’t in particular aiming to attract beginners.

What Are Pips?

Some brokers are now beginning to quote the other major currencies to 5 decimal places. So it seems likely that the pip will stay at 0.0001 units for most currencies.

Most traders record their profit and loss in foreign exchange trading pips as well as in money. This enables straightforward comparison of one trade with another so you can appraise a system. It also means that traders can debate their results in a foreign exchange forum without unveiling the scale of their account or their profits in greenbacks and cents.