Market events always have a profound effect on the way people trade, so preparing for them, if possible, should always be a part of your trading strategy. Naturally, not all events can be predicted – some happen completely unexpectedly and can turn the whole trading world upside down. We are here to help you deal with these phenomena and show you what tools can be used when trading them. If you’re still new to this type of trading, reading this article may very well boost your success rate significantly. Knowledge and planning are absolutely essential in this business, so read on and see how to prepare yourself to make the right move at the right time.
Market Events | Can they be predicted?
Like we said, some market events cannot be predicted, but a lot of them are scheduled in advance. These are things like announcements of various agencies or governments about the situation in a particular economy. These announcements may concern a country’s GDP, interest rates, unemployment rates etc. Take Nonfarm Payrolls for example: they are issued by the US Bureau of Labor Statistics every first Friday of the month and there are many other examples just like it. This is where your economic calendar becomes extremely important because it contains all the most important market events and shows them to you in advance. This way, you can make plans and always be one step ahead of the market. But how exactly do you trade in these situations? Stay with us and find out!
Market Events | How long do they affect the market?
Time is a very important element when market events occur because not all news retain their value the same way. A market event can occur and within hours a government or an agency can issue a statement about it, thus diminishing its effect. That’s why you don’t necessarily want to trade long-term options, even though market events often increase volatility of the market at first. In the end, a lot of it depends on your own interpretation because every piece of news does not affect all assets in the same manner. To be able to interpret and predict the effect of market events correctly, you will first have to spend some time keeping track of the news and the way the market reacts to them. Once you immerse yourself in everything sufficiently, you will know which events affect which asset and will be able to make correct predictions.
Market Events | Conclusion
So, market events can be scheduled and completely random, but once you gain enough experience you will know how they affect you. Interpretation plays a key role in all of this because there are many different parameters that affect assets in a different manner. Remember to always use your economic calendar to keep track of future scheduled events, since that way you can come up with a more reliable strategy. And if you need more educational articles, just look around our website – there is a lot to learn.