How can beginners trade news? Priority number 1: Manage your risk.
News trading is heavily based on short term price trends. This means that the rapid movement of an underlying asset after a macroeconomic report can be attributed to news trading. The market’s reactions to economic reports can be unpredictable, thus the need for risk management in every trade.
What are economic reports?
The economic reports measure the health and growth and are sometimes called trading news. An economic report may become more influential or important depending on the situation. For example, in 2022 inflation reports were more prominent due to an unusually high price increase after the pandemic.
Beginners should start by observing the market’s reactions to the main economic reports that affect national currencies. These vary according to the country’s size, development and the current state of the economy. Let’s look at scenarios from five countries and regions to see how and why their currencies might move after these reports.
Three news stories that impact the GBP
The Great British Pound (GBP) is the UK’s national currency and symbolizes the world’s sixth-largest economy. The UK is a mature, transparent economy.