Saturday, March 10, 2007
Forex Day Trading System: the volatility when news break out
Forex Day Trading System: the volatility when news break out
People many times ask me why does the volitility increase significantly when a fundamental news announcement such as FOCM or NFP comes out?
It may seem to be simple question for some of you, but I must tell you that it is very important for those who don't know.
Volatility is driven by the number of people in the forex market to buy or sell a currency pair in day trading. So, when the news breakout, the banks or the traders realize what is the true value of the currency. So, lets say if US fed release a fundamental announcement that is favourable for USD, it would mean that people need to buy dollar and close all the positions which are not in short in dollar.
This will increase the volatility tremendously and the candlestick bars will get bigger and all the traders who do technical trading will jump in..In other words, the online forex trading market will become active..
Thants all in today's post..Like I said in many previous posts, Keep visiting to learn more in the day trading of the currency market..You can add this page to your favourites or can add subscribe to the RSS feed by adding the chicklets on your yahoo/google or technorati page..
People many times ask me why does the volitility increase significantly when a fundamental news announcement such as FOCM or NFP comes out?
It may seem to be simple question for some of you, but I must tell you that it is very important for those who don't know.
Volatility is driven by the number of people in the forex market to buy or sell a currency pair in day trading. So, when the news breakout, the banks or the traders realize what is the true value of the currency. So, lets say if US fed release a fundamental announcement that is favourable for USD, it would mean that people need to buy dollar and close all the positions which are not in short in dollar.
This will increase the volatility tremendously and the candlestick bars will get bigger and all the traders who do technical trading will jump in..In other words, the online forex trading market will become active..
Thants all in today's post..Like I said in many previous posts, Keep visiting to learn more in the day trading of the currency market..You can add this page to your favourites or can add subscribe to the RSS feed by adding the chicklets on your yahoo/google or technorati page..
Labels: Forex day trading system, forex technical indicators, fundamental announcement, fundamental news, nfp, non farm payroll, volatility
