The Currency markets is quickly becoming one of the popular investment vehicles due to the huge volume and liquidity. However, it is also one of the most volatile investment vehicles because of its sudden price fluctuations and the truth that a lot of the market is heavily leveraged. Therefore, fortunes could be made or lost in short order making the need for a reliable investment system very urgent indeed. Even though festival upon charts that track price movements and other forms of technical analysis to help determine entry and exit points, there are several investors who like enter and exit positions based upon news releases.

In theory, small Forex retail traders must have a slight advantage when it comes to capitalizing on the way the news affects the markets. With immediate Internet access and a never ending stream of brokers ready to execute trades at any hour of your day, small investors will be able to buy or sell a posture quicker than some large conglomerate, mutual fund, or hedge fund. The market can literally adjust in minutes to relevant news releases so investors who move quickest can capitalize--in theory.

Of course, it can boil right down to knowing what news is pertinent and then to determine how that will affect the currency exchange rates. Even news from countries apart from those in your currency pair can play a significant role in a nutshell term price corrections. For all those wishing to trade in the Forex based upon news releases, there are 8 major currencies currently playing significant roles available in the market, including:

1. U.S. Dollar(USD)
2. Euro(EUR)
3. British Pound(GBP)
4. Japanese Yen(JPY)
5. Canadian Dollar (CAN)
6. Australian Dollar(AUD)
7. Swiss Franc(CHF)
8. New Zealand Dollar(NZD)

Because the USD is a backer in nearly 90% of all transactions on the Forex, the release of key economic indicators from the U.S. are always important to the forex rates. These data are released at regular intervals which supposedly levels the playing field between your large and small investors. In theory, they should be in a position to capitalize upon short term price fluctuations caused by the release of these key indicators:

1. INTEREST Decisions by Central Banks/Financial Policy Makers
2. GDP rates
3. Balance of trade
4. Unemployment data
5. Inflation
6. Retail sales/manufacturing output
7. Business Confidence as dependant on Outlook Surveys
8. Consumer Confidence Surveys
9. Manufacturing Confidence as dependant on Outlook surveys

Trading on the Forex based on news releases means capitalizing upon short term fluctuations in the market since it corrects itself. Because these corrections can occur in just a matter of minutes, it is vital because of this type of investor to capitalize quickly or risk jumping after the market has recently adjusted for the new information. While this is theoretically possible, it is very possible that the big investors had access to the information prior to its release. If these investors have previously shifted their investments accordingly, then your market could have already corrected for the news before it had been released--at least partially. If this is the case, then the small investor will jump in too late and likely face a loss.


Indeed, trading upon news releases is very dangerous since it also encourages over trading--a factor known to lead to losses--especially on the Forex. That is why most Forex investors rely upon technical analysis and their trusty charts when making decisions about entry and exit points that you can buy!