Preempting forex trading news to beat the markets
By Paul Reid
02 November 2023
Staying ahead of the financial markets and preempting price actions rather than reacting to them can sometimes be the fine line between huge profits and horrific losses. New traders often turn to forex trading news for insights and market dynamics. However, by the time these news pieces hit the media, the “optimum” window for action has usually passed.
If you are trying to level up your currency trading, you need to preempt the forex trading news, not follow it.
How to stay ahead of forex trading news sites
By keeping a close eye on economic indicators, political events, and other factors that impact currency values, traders can position themselves strategically and enter trades at optimal times. This gives them a competitive edge over other participants who may be slower in reacting to the latest developments.
If this all sounds like predicting the future, it is. Whether you are speculating about a coming US jobs data release, trading based on an overbought Stochastic signal, or testing the tarot cards, it’s all about predicting prices and events that haven’t happened yet. Nobody can predict the future, or can they?
Over the last decade, the emergence of fast connections and AI technology has enabled influence for those with power and deep liquidity. Whenever the markets are being pushed, subtle footprints can be seen if you know what you are looking for.
Here are some strategies you can try for getting a better read on today’s markets:
1 . There are numerous websites and platforms that consolidate market news from various sources and regions, providing a one-stop shop for all your information needs. By using such tools, you can get a broader picture of what’s being reported, and avoid biases. Your job is to compare the narratives that each nation is presenting.
Are all channels in harmony with each other, or is there divergence? Harmony could suggest that the overall forex trading news is accurate. A divergence in the narrative means one of the channels might be putting a spin on the story, and that’s where you should start digging. Why the deception? Who is modifying the facts and why?
2 . Tune into live video sources such as Bloomberg, Reuters, or Financial Times for comprehensive coverage of global markets. These outlets employ experienced journalists who deliver real-time updates on economic data releases, geopolitical events, and central bank announcements.
More importantly, this is where the big investors get their forex trading news, and a positive or negative spin on whatever is happening in the world will influence their investment decisions and consequently the markets.
If Bloomberg says the S&P 500 might be crashing, you can be sure that many investors would sell first, and ask questions later.
3 . X is a useful social platform for traders seeking instant updates on forex trading news. Follow influential traders, analysts, and institutions who regularly share insights about upcoming events or market-moving developments.
Look for those content creators who walk off the beaten path. Filter out the conspiracy theorists and then look for posts that challenge the mainstream media narrative.
4 . Many industry experts offer daily or weekly forex trading newsletters that provide valuable analysis and commentary on recent market trends. Subscribing to these newsletters will give you an edge by keeping you informed about key events impacting currencies.
Some content creators are more interested in acquiring subscriptions than sharing market wisdom, so watch out for clickbait titles. Keep in mind that forex trading newsletters can be used as a foundation for future and long-term market analysis and research. If you are a daytrader, avoid acting on such sources.
The 4 steps above are a good start, but they won’t give you that time advantage until you start making your own economic speculations. Set some time each day to review the latest forex trading news and then question anything that diverges from the global narrative or your own sensibilities.
More strategies for anticipating forex trading news
Keeping an eye on the economic calendar is a good idea. These calendars provide information about upcoming economic releases, central bank meetings, and other important events that can, and usually do, impact currency prices. Monitoring financial news outlets and reputable websites and see how they are reacting.
Position yourself as an investigator, trying to resolve a mystery. The forex trading news sites deliver the evidence of events, your job is to figure out why. Sometimes the cause is obvious, but there are times when a rise or fall doesn’t make sense. Get to the bottom of what’s causing the price-action and you’ll know more than the average trader. Information is power, so start digging. Keep a big-picture perspective and not get lost in the daily changes.
Setting up alerts for specific keywords related to your preferential assets can get breaking news stories to your eyes faster. Remember the adage, buy the rumor, sell the news. If you have open positions that are doing well, and those assets appear in the news, be prepared for volatility. Consider modifying your Take Profit and Stop Loss settings the moment the mainstream media catches up to you.
Also, joining in online forums or communities where experienced traders share insights and discuss potential market-moving events is a must. Post your hypotheses for all to see and consider the reactions of your fellow traders. Keep an open mind about their responses, and ask “why” as often as possible.
Lastly, practicing risk management techniques can save you from bad forecasts. Anticipating forex trading news and acting on your observations is a powerful method of forecasting, but when major events happen after you’ve committed to a trade, your trading account can be at risk due to high volatility. Using Stop Loss orders becomes even more critical during times of anticipated high volatility.
Preempting forex trading news offers greater possibilities for catching rallies and crashes early, but it also means you are on the fringe, a trailblazer, and when you head out into the unknown, it’s easy to fall victim to unpredictable events that nobody can foresee.
If you hear about a price action and regret not riding the rally, don’t let your emotions sway your strategy. If forex trading news sites are reporting how JPY suddenly gained strength, be cautious about jumping on the trend. The proactive JPY traders who entered the market at a low price are counting on you to buy in now. When one trader wins, another trader pays for it. It’s the nature of the financial markets. If you are buying high, you are paying those who buy low, sell high.
If you make your analysis, and preempt the forex trading news reports in your conclusions, but still see the markets have already reacted, you will need to think carefully. Media attention can prompt more trading volume and boost current conditions, but if the media puts a negative spin on the price action, you’ll be entering at the worst possible time.
Whenever you get mixed forecasts based on observations and market prices, move on to the next asset or set a modest trade to test your theories. Trade smart.
One last thing. If your broker isn’t committed to offering the best possible trading conditions, then trading costs will be high, resulting in greater losses and fewer gains. Exness focuses on optimizing spreads and giving clients a trading edge, and this is enhanced by the many features that were created to protect Exness traders from volatility. Make sure you are using all the tools at your disposal.
This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.
Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.
Back to all articles