News and their expectations during stock trading.

Almost every trader is familiar with the news trading strategy, which involves opening trades immediately after the release of this or that news.

But not everyone knows that sometimes the market reacts more strongly to expectations than to the news itself, and using this aspect in trading brings much greater profit than transactions after the news is released.

Therefore, when conducting fundamental market analysis, one should take into account not only those events that have occurred, but also those that are still expected.

At the same time, there are public and hidden factors that should also be taken into account when planning your transactions on the selected currency pair.

Only in this case will you be able to reduce the number of errors when opening positions. • Typically, trading on news is based on a fairly simple scheme - after the benefit of the next news, its impact on the currency is analyzed and if the impact is positive, a deal is opened to buy this currency, if negative - to sell.

But sometimes currencies behave unpredictably, this happens because the expectation was not fully met, that is, the news was not as strong as expected. In this case, a rollback or even trend reversal.  

Therefore, trading on anticipation is in most cases more effective than playing on news.

• As a rule, it is known in advance whether the discount rate will be raised or lowered; in addition, there is data on a preliminary assessment of the trade balance and other economic indicators that may affect the exchange rate.

The market, awaiting confirmation of existing information, is gradually moving in accordance with forecasts; this is the moment that is most attractive for transactions.

The date of appearance of most economic news is known in advance, the time of their release is published forex calendar, which is precisely the main tool of a trader who uses fundamental analysis.

The “Forecast” column is especially useful, which indicates the expected change in the published indicator. It is she who has the greatest influence on the existing trend.

To open a trade, you should analyze the upcoming news, evaluate forecasts and compare the result with the existing trend. If the trend moves in accordance with the forecast, you can open a trade.

For example, in 4 hours the publication of unemployment data in the USA will take place; according to preliminary estimates, it is believed that there will be a fairly significant decrease in the indicator, at this time the USDJPY currency pair is confident uptrend - open a buy deal.

Everything is quite simple, because one of the exchange rules says - “Buy on rumors, sell on facts.”