Trading the news

Trading the news has  achieved considerable popularity over the past several months among forex traders.  Obviously, trading the news in equities and among institutional investors, has been a way of life for many years.  It is generally agreed that the "market" factors in the "expectations" of mass of investors and economists.  It is when there is a variance between the expectation and the actual number for a news release, that trading the news has become a technique or methodology for serious traders.  Technical traders watch the charts and look for repetitive patterns that hopefully will predict futures market movements.  The news trader, essentially does the same, but limits the focus to the time immediately after the release of the specific numbers.  The accuracy of these anticipated movements depends on the accuracy of the information received and the impartial timeliness of the news release.  Primarily, in the US, Canada and Great Britain there is a relatively fair playing field in which the general public, through paid news subscriptions, can have access to the information concurrent with the professional traders and large institutions.  In many countries, the news is leaked to "privileged" parties prior to release to the general public which gives the advantage to the "privileged" few.

While there are many "News Traders" and news trading services on the market, the most accessible and consistently profitable, seems to be Freedom Forex, with Tom Yoemans.  Tom Yoemans has been "trading the news" for several years with apparently consistent results.  The subscription is not cheap, but also not expensive.  I think it represents an excellent value for the services and education provided.  Check them out at Freedom Forex - Tom Yoemans.  Tom Yoemans only takes a limited number of new subscribers each month, so if they are "sold out" just leave you name and email and they will get back to you when a slot becomes available.

To trade the news, you must have access to an accurate and timely news service.   There are several news providers, including: Trade the News, Need to know news, Reuters, Blomberg, Dow Jones and several others.  The price range for these services run from $40 or $50 per months up to $1700 per month.  Do your homework, try to obtain a trial subscription and make sure that the service provides you with the information you need to be successful on a timely basis.  A delay of 1 or 2 seconds can cost you lots of money.

You also need a good forex broker.  There are hundreds of forex brokers out there, some are excellent, some are ok, and others are outright scams.  Be careful and do your homework before committing and significant amount of money.  Most forex brokers offer a "demo" account where you can practice with "play money".  These demo accounts  are useful to get familiar with the trading platform but fills and results on the demo account are quite different that a live account with real money.  Don't be misled into the claims that the "demo" account is exactly the same as a real account.  They are not.  Most brokers make it very easy to deposit money into your account but with many brokers it is not as easy to withdraw your money.  Do your homework.  The recent bankruptcy of Refco, which was one of the largest forex brokers, should be a warning signal to remain constantly alert.  Remember, forex is largely and unregulated business, (although) some brokers try to imply otherwise.  Just because a brokers is a member of NFA or another association, does not mean that their forex business is regulated.