Trading The News
The futures market is traded using various methods. The most popular methods are technical and fundamental analysis. These are the broad ways in which the strategies to take the traders are defined. There are many things that form these strategies which one should be clear of before using any of these two studies. For fundamental analysis trading, the news is watched closely to generate new positions.
Trading an important news
News trading is the strategy that waits for the release of an economic report before establishing a new position in the market. Most of the news that could move the markets are scheduled beforehand letting the investors be prepared for them. The news and the economic releases are anticipated by the market participants and this lets them change the valuation of the assets. Once the news is made available to the public lets the participants of the market make use of the release and take positions in the market.
The economic calendar is something that is watched closely by the traders. These calendars are available online. The economic calendar lets the traders know what the consensus of the market is, the result that was previously published and also when the data will be released. If the economic event is huge and is watched closely then this could cause major price volatility once it gets released. Once the economic data is released the price will see a huge move, either towards the buy side or the sell side.
After the data are released the traders will look at those results and compare it with what the analysts are expecting. I suppose the analysts feel that the result of a company could come better than what it had at the last quarter and the actual results are not good and do not meet the market expectations then this leads to a heavy sell-off. Most of the corporate earnings are released outside the market hours.
How asset get impacted by the news
Different events and data releases impact the market in different ways. When there is a stock data release it does not cause any changes to the country’s economic outlook. When trading currencies many different kinds of economic outlook will be looked at. When trading the futures contract it is important to understand the data that will impact it. The best way is to wait for the data release and once the volatility subsides then one can enter the trade.