In this era where information can be an extremely powerful and strategic asset
Whether to individuals or corporations, and information equals money, especially for a trader, shutting yourself off from news can be suicidal. The Forex market is extremely sensitive to the flow of news that is related to it, and major short-term currency moves are almost always preceded by changes in fundamental views influenced by the news. Traders around the world make a living by processing and translating information into money. Financial news services providers know how important news is to the Forex market players, and charge a premium for it. It is not uncommon to get hundreds of headlines of news that are potentially relevant to Forex trading from any news service provider on an average trading day.
Traders, especially those who day trade the Forex market, require the latest up-to-the-second news updates so as to facilitate their trading decisions which have to be made at lightning speed. They mostly make use of online financial newswire services such as Dow Jones Newswires, Bloomberg and Reuters, which display the latest financial news on their computer monitors. Since the speed of news dissemination is very important to traders, many opt for these online instant news services rather than depending on daily newspapers like the Wall Street Journal or the Financial Times which carry stale news that is of little use to traders.
Publicly released news is disseminated to the various newswires.
Any trader with access to these wires can tap into the information given out, and react accordingly in the Forex market. However, institutional players do get information that retail traders don’t, as they get privy access to order book information in their computer systems, and may also know something that others don’t through their personal contacts in the industry.
In the world of Forex trading, there are no rules or restrictions against insider trading!
Anyone who possesses information that is known only to a select few can and do trade that information in the Forex market. Sometimes, such news may give an unfair advantage to these institutional players, but at other times, this isolated news access may not translate into real market action if other players do not have that information.
Think of it this way:
The Forex market is dependent on news, for if there is no news, there would be little or negligible price movements in the market. Even if currencies may move according to the technicals sometimes, the technicals have been established previously by news or expectations of future news, and so the influence of news on currency prices is inevitable and inescapable.
