One of the most popular trading methods is news trading. It is an essential part of fundamental analysis used by both long-term investors and traders. This method requires understanding of the types of news that can have influence on the asset performance.
What is news trading?
News trading is an approach that seeks market entry opportunities after significant pieces of news are published. This approach is based on the fact that economic data is one of the main triggers of asset volatility, which is why many traders and investors follow scheduled reports and economic calendars to spot the releases on time. News trading focuses on one particular event at a time and follows the short-term spike in the asset price that follows the release. This approach is a part of fundamental analysis, although the latter assesses the underlying economy on a larger scale.
Types of news
News that affect the market fall into several different categories: financial, economic and political.
Economic and financial news are often presented in the form of scheduled reports. They are regularly published by publicly traded companies and official authorities. This makes them more predictable as one can always check when a certain report is due.
Political news are less scheduled and often unexpected, however, they can cause high volatility on the market. Being aware of the political background that may concern your asset of choice could potentially help enhance your trading experience.
To learn more about how news may be applied in trading, watch the video below.
Where to find relevant news?
If you know that a certain report is due to be published and you understand which asset it may affect, you may plan your trading activity accordingly. To find this information, you do not need to look through many resources. In fact, it is enough to just refer to the “Market Analysis” tab on the IQ Option platform to find all types of important news.
Switch between the economic calendar, earnings calendar and news to have a better understanding of what events might have an effect on the traded assets. Each piece of news is provided with an explanation, importance grade and the expected impact it might have on the market.
