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Top three reason for which you should analyze the news

News events are powerful price driving catalysts in the Forex market. The price of the major pairs starts showing a high level of volatility during the high impact news. Let’s assume, you have planned to execute a short order in the USDSGD pair during the New York trading session. But for some reason, you missed the trade. After opening the trading chart, you are surprised to see the USDSGD pair has rallied by more than 200 pips. If you had executed the short order, you would have lost a big sum of money. So, what is the key reason for the strong bullish rally? The 200 pips movement is just a reflection of positive NFP data. So, in order to make a profit from this market, you need to stay tuned in to major news.
So, far we have given one simple example for which you should learn to analyze the major news. Now, we are going to highlight the top three reasons for which you should try to trade with fundamental analysis.

Allows you to see the broader picture

If you trade the market based on the technical data, you are going to lose most of the time. Those who have strong technical skills might be able to make a consistent profit but still, they won’t have been able to take advantage of the major market news. Let’s say, U.S dollar has cut their interest rate in the FOMC meeting minutes. Do you really think your technical analysis can save you from such major news? With the reduction of the interest rate, the U.S dollar index will be sharply felt in the global market. As a result, the green bucks will start trading lower against most of its major rivals.
Those who have the knowledge to analyze the fundamental data can easily make a decent profit by shorting the U.S dollar. Forex trading is all about the quality execution of the trades by blending the three major forms of market analysis. So, if you want to survive in trading, make sure you try to see the broader picture.

Allows you to trade the key reversal

Those who have the skills to analyze the major news can easily trade the key reversal. Reversal trading strategy is by far the most dangerous technique for the retail traders. But with the help of major news, you can easily trade the major reversal and make some decent profit. You don’t have to learn major economics. Just try to analyze the major news so that you can make a big profit without having any trouble. Once you read more  about how to analyze the major news, a reversal trading strategy will become easier. In fact, you will be able to make bigger gains by blending technical and fundamental data together.
Being a naïve trader, you should never try to trade the major reversal. First of all, learn the trend trading strategy. Once you become skilled at the trend trading strategy, focus on the reversal trading method.

Helps you to stay in the sideline

The Forex market can become extremely volatile and new traders might find it impossible to execute the trade. However, they will still open new orders because they don’t know how to find a stable market. On the other hand, those who have the skills to analyze the fundamental data can easily wait in the sideline. Fundamental analysis allows traders to look for the best possible trade setups. You don’t have to push things to the next level to master this technique. Just start with the basic news factors and slowly you will learn to trade the major news.

Conclusion

If you learn to analyze the major news, you can reduce the risk to a great extent. In fact, you start trading the major news and earn a big profit in a short time. However, you need to learn trading by using the demo account. Unless you demo trade the major news, you can’t earn decent money.

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