News Aggregators for Trading
All financial markets are volatile but foreign exchange market makes other markets like stock exchanges a pillar of stability. There is so much going on at all times that it is hard to predict what is going to happen. For example, you are trading in Swiss francs against US dollars. All of sudden you will find that dollar is falling against francs, why? Tsunami has caused havoc in Japan; it is going to affect the balance of payment with Japan. It means that you just cannot under estimate the importance of timely decision making if you are going to invest in financial markets in general and Forex market in particular.
You would have heard that often enough the world has become a global village. Nowhere is it more evident than in financial markets. Another old adage is bad news have wings. Thankfully, in these times good news also has wings. It means if you are going to have a bumper cotton crop in Egypt it is going to cause a fall in the prices of cotton in the international trading. If you get this news on time, you can make a large profit in the futures market.
For instance, last year I sold cotton in March 2011 around dollar two mark and bought it in August around 0.9 dollars making a reasonable profit. All indications were that we are heading for a bumper crop. Although it is a good example but it does not hold for Forex market. In Forex market, you can make or loose a fortune in a matter of few hours. For instance in 1992 what was termed as black Friday British pound moved 200 points in one day.
The treasury department was supposed to announce financial data, all projections were positive. It meant that British Pound was bullish and moved about 70-80 points in positive direction. Most traders went home satisfied with day’s work. Late in the day, treasury department made the announcement in which all indicators were negative. It of course prompted a panic reaction from market and British pound fell like a rock. All of the traders who had left for the day and were not in touch lost roughly the same amount of money that I have made on cotton this year.
It means you just cannot take anything for granted if you are trading in the spot currency market. You have to stay alert and up to date at all times.