The news is always the most essential factor in the trading industry. If you ever visit a busy trading room in the United Kingdom, you will notice the people are spending huge time in analyzing the major news. In all corners of the trading room, everyone is busy trying to decipher some sort of news. The professionals know the importance of news factors in trading. On the other hand, have a look at the retail traders’ work stations. You will notice that they are busy with the technical details. It’s like they are trying to build a rocket that will visit Mars next week.
Trading should be done in a very systematic way. You have to learn the importance of the news. To help you develop your skills, we are now going to discuss the most important news factors in the investment industry.
Interest rate decision
Interest rate decision might be the most important thing you should consider as a CFD trader. Let’s say, the UK has hiked their interest rate. It means, people will pay more interest when they borrow money from the bank. The central bank hikes their internet only if their assessment tells them their economy is doing well and the business owners can deal with a higher internet rate. So, it’s very obvious the sterling will be trading higher against most of its major rivals. On the other hand, if the central bank cuts the interest rate, the currency loses significant value against its major rivals. It also impacts other instruments. Let’s say, the FED has cut their interest rate based on 50 points. As gold is measured in the dollar, the weakening of the U.S dollar will push the gold price significantly lower.
Learning about the labor force is a great way to decide in the investment industry. The experts of Saxo always give priority to the unemployment claim of a country as it tells how the economy is doing. Visit their website here and learn more about the news factor. If more jobs are added to the economy, it means the economy is doing well and expanding at a decent rate. On the other hand, when the unemployment rate rises, it means people are losing jobs. Industries are having trouble hiring skilled workers. This directly impacts the CFD industry. So be cautious about the news factors because ignoring this factor can result in a big loss.
Average hourly income
The average hourly income tells the lifestyle of the people. If the average hourly income of each citizen rises, you can expect they will spend more money. This means the economic wheel will move faster. On the other hand, when the average hourly income drops, this means a slow down the wheel of the economy. Usually, this data can be founded from the business websites. Know the schedule of such data so that you can scale your trade correctly and deal with the complicated nature of the market by taking advantage of the average hourly rate of income.
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Many retail traders don’t know the impact of press conferences on the market. If you trade long enough, you will notice massive spikes in the price of the trading instrument during the press conference. Let’s say that you have executed a long trade in oil. All of sudden, OPEC decide to remove the cap on oil production. So, the supply will increase and the demand will fall. Eventually, the price of oil will tumble sharply.
So, be careful about such news so that you don’t have to lose money on such an event. Even the professional avoid taking trades during such events as it helps them to keep their fund safe. Never risk a small amount of money and trade during the press conference. This might result in heavy slippage and you have to deal with unplanned losses.