There are two major ways to analyze the forex market: technical analysis and fundamental analysis. While many premise their trading decisions on technical analysis, the fundamentals are an aspect that many experienced traders do not joke with.
With technical analysis, forex traders focus on price trends, technical indicators, resistance and support levels, etc. In simple terms, fundamental analysis involves trading the news. So, the big question is, how do you trade forex on news?
In this article, you will learn how to trade forex on the news alongside spotting various trading opportunities using fundamental analysis.
What Are The Important News In Forex?
There are a lot of news releases across the forex market. Identifying and familiarizing yourself with the important ones is the first major step to trading forex on news successfully.
Below are the major news releases and economic events in the US and beyond that you should prioritize for trading as a forex trader:
- Non-Farm Payrolls: Release first Friday of every month by 8:30 AM. NFP reports contain the net change in employment jobs in the completed month.
- United States Gross Domestic Product: US GDP is released quarterly and represents the monetary value of the services and goods offered and produced, respectively, across the US during this period.
- US Federal Reserve Bank Federal Funds Rate: Released 8 times per year and represents the interest rates depository institutions use to lend to or borrow from other institutions.
- Australian Cash Rate: Released on the first Tuesday of each month, apart from January. This news represents the interest rate that financial intermediaries charge on overnight loans.
- Australian Employment Change: As the name suggests, it represents the change in the number of people employed in the previous month and now. This news is released monthly halfway into the month.
- Bank of England Bank Rate: This news is released monthly and represents the official rate the Bank of England lends money to financial institutions.
- Canadian Employment Change: Released monthly, too; this news represents the change in the number of people employed in Canada during the just-completed month.
There are a few more news you could also consider. These include:
- European Central Bank Refinancing Rate
- Bank of Canada Official Bank Rate.
- Reserve Bank of New Zealand Official Cash Rate
- Etc.
Important Times of News Release
As you must have seen, all the key events and news releases discussed in the previous sections have their unique release dates. However, beyond their dates, they also have times that forex traders must prioritize to take maximum advantage of the market.
I have categorized these important times based on the country:
| Country | Time |
| United States | 8:30 AM to 10 AM |
| Japan | 6:50 AM to 11:30 PM |
| United Kingdom | 2 AM to 4:30 AM |
| Canada | 7 AM to 8:30 AM |
| Germany | 2 AM to 6 AM |
| Switzerland | 1:45 AM to 5:30 AM |
| Italy | 3:45 AM to 5 AM |
| New Zealand | 4:45 PM to 9 PM |
| France | 2:45 AM to 4 AM |
| Australia | 5:30 PM to 7:30 PM |
How to Trade Forex on the News
The truth is, there are several ways to read and trade forex on the news, depending on your trading strategy. You need consistent practice to master the skill of trading forex on the news. If you aren’t confident in your trading skills yet, you should consider demo trading the news first before going live.
The news may be very volatile – one wrong move, and you may be on your way to blowing your trading account!
Nonetheless, here is how to trade forex on the news:
- Choose and focus on one or two important news with high market potential.
- Wait and prepare against the news publication and trade according to your plan.
- Market reactions are typically highest and most profitable within the first 30 minutes to 3 Hours after the news release.
- Regardless of what the news says, never go against the market if it doesn’t favor your plan or expectations. It’s a popular traders’ jargon that you should never go against the trend – it applies when trading the news, too.
- Because you are trading forex on news doesn’t automatically mean you shouldn’t consider technical analysis, too. Prioritize both equally.
- Never rush into a trade. If you miss this news release, several other releases are oncoming. If you rush in, remember, you will rush out.
Important Tools You Will Need to Trade Forex on News
Here are tools and resources you should prioritize if you are a Forex news trader:
- Central Bank Calendar: To know when major news is released.
- Economic Calendar: To know when Central Bank interest rates will be announced.
- Source of News: To know what is happening in the market in real time. Subscribe to the news section on my website to stay up-to-date with market news 24/7.