As the market is evolving, so are the new and novel trading methods and Forex Robots that are being invented every day. New trading strategies are absolutely necessary especially as the complexity of profiting from financial markets increases.
The same story is true for the forex market in which traders are able to invent all sorts of new strategies and even forex trading bots on their own with the help of the tools that are being developed just for this purpose.
A rather peculiar method of trading that is becoming more and more popular in the foreign exchange market is known as news trading. But news trading is not something that has been invented recently. It is, indeed, one of the fundamental methods of trading in the forex market – did you get the pun!? Don’t worry, you’ll get it soon.
In this article we are going to pay tribute to the less known trading style news trading and see how it can be executed to the perfect tune with the help of forex trading robots.
News Trading in the Forex Market
As we discussed very briefly in the intro, there are different trading styles. A trading style is much bigger in its scale and scope than a trading strategy. A trading strategy is simply the plan you use to execute every single trade at the moment. But a trading style is the big picture. It is the overall approach to trading you have. It is, in other words, your trading mentality and the perspective you have toward trading.
There are more well-known trading styles that are impeded by traders, such as day trading or scalping, which fall under the styles known as high frequency trading. Then there are those styles that are more long term in their scope of time, such as swing trading and position trading.
All of these trading styles are basically very similar and they only differ in certain variables. As a result you can see which one is more befitting your conditions, including personal traits all the way to the initial capital you want to bring to the market, and pick the best one.
But the trading style we are discussing in this article, news trading, is different from all of the others. You see, all these other trading styles are basically revolving around technical analysis, which is the most widely applied form of market analysis based on past price movements in order to detect patterns in the market that might repeat themselves in the future.
The differing point between news trading and other forms of trading is that news trading relies on fundamental analysis, which is a totally different form of analysis compared to technical analysis.
In news trading, entry and exit points are calculated not based on historical data and price movements, but based on the literal news that is being published or released or a newsworthy event that has taken place or will take place in the world.
As a result the following events can be considerable in news trading:
- Release of important economic data: some news related to the economy are released regularly around the world and in each economy. This includes news related to economic data like inflation or growth domestic product and also interest rates.
- Upcoming geopolitical news: there are certain events that are upcoming and planned in the world. For instance an important summit or even political speech. These events can impact the market and must be taken into account with news trading.
- Unexpected geopolitical news: on the other hand, there are news events that are clearly not planned. For instance a tragic incident such as the death of an important political figure or even more tragic, the beginning of war between two countries, and other similar events.
All of these “news” events impact the market and the trader can execute traders by considering them and their market impact.
You should read: Backtesting Your Forex Trading Robot for Success
Why Is News Trading Useful in the Forex Market?
So why is news trading specifically suitable with forex? The reason is in the nature of the foreign exchange market. While all financial markets are at the mercy of the larger scale economy inside of which they operate, the forex market is particularly more susceptible to economic factors than other financial markets.
This is because the forex market is in essence the most readily available and the most immediate form of money that literally everyone around the world uses on a daily basis and has been doing so for thousands of years – i.e. currencies.
This is exactly why the forex market is more susceptible to the release of important economic data and also the release of important geopolitical news. It is precisely because the currency of each country is easily affected by such events.
So when these news are released, it can create fluctuations in the forex market. These fluctuations can be quite momentarily or even rather long lasting. They also differ in their strengths, which is obviously tied to the potency and impact of the news released.
You should read: Choosing the Right Forex Trading Robot for Your Needs
How Can News Trading Be Done with Forex Robots?
Automation makes everything easier. This has been a fact for human societies ever since the industrial revolution. So it is no wonder that automation can also make trading in the forex market easier.
But this fact is heightened in the case of news trading. Forex trading robots can help immensely with news trading, because it is more difficult for individuals to keep track of all the world of news and economy for the important bits and pieces. You have to dedicate a whole lot of time and energy just to keep up with the schedule of news trading.
This is why it would be a much better idea to use automated solutions for this purpose. And perhaps there is no better automated solution for news trading than XauBot Pro.
Useful Tips and Tricks of News Trading with XauBot Pro
XauBot Pro is an expert advisor which is able to trade all forex trading pairs. So you can use this high level of compatibility and apply it to news trading for any foreign currency pair that you want.
But how does this sophisticated form of fundamental analysis work with XauBot Pro?
There are many features on this automated trading tool that pertain to fundamental analysis. Most importantly XauBot Pro comes equipped with a news filter and holiday filter.
Both of these features are directly related to important events that can impact the forex market. With the help of these tools you can easily manage news trading and how important events in the world can impact the forex market and more specifically the outcomes of your own trades.
For instance, you can choose for the bot to automatically stop trading during these volatile times, or rather opt for the bot to trade the news.
You should read: How Forex trading robots work: A comprehensive overview
News trading is a style of trading that is quite ideal with the forex market because the market of foreign currencies is highly influenced by important economic factors and also salient geopolitical events. You can use forex trading robots for news trading, such as XauBot Pro which comes with top of the line fundamental analysis features, including news filter and holiday filter.