Do Traders Need To Research Economic News?

The more research you do the better prepared you'll be. More preparation will directly improve your overall results.
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Economic News Research

We just have a quick question that I’m following up with from a viewer asking us whether additional news and research is always necessary or whether they can evaluate a currency’s bias without it.

So the answer to this question is basically two parts. It’s basically what info are we using to establish our current buyers and then what additional research are we referring to?


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So for the first one, there are quite a lot of factors that we need to consider for developing a particular bias on a currency.

Most of the heavy lifting has already been done for you guys by providing the macro fundamental bias for each currency, in the fundamental drivers report on a weekly basis by providing the dominant sentiment theme and current sentiment drivers reports and the video commentary on a daily basis. So we’re having that information.

Most of the additional analysis that we had to do on a daily and weekly basis to establish those biases has already been done for you, so you won’t require much additional information in that regard. However, there are obvious advantages to doing additional research from market analysts and economists and investment banks out there.

It is often with the additional research that you might find one or two pieces of really interesting and really helpful information that helps you to recognize certain news coming through the squawk and how to trade it. So imagine that you’re reading an article about Italy for example and the current date and solvency issues. And in this article the analyst explains that there is a possibility of a special debt relieve vehicle that easily might use in order to assist with the state issues and that it will solve all of the country’s problems.

Now also imagine that you’re sitting at the, PC and you have the squawk running and suddenly you do an announcement coming out over the squawk saying that specific thing that you read about actually occurred right now and you just know that it’s going to be market moving and you jump into the trade immediately because you know what it means for the Euro.

Now obviously that is just an example of what can happen, but there is real benefits into doing that additional research. So the type of things that you want to look at in articles, especially if you read something like a Bloomberg article for example, always make sure that what you’re reading, has, relevance to the specific currency, or instrument that you want to trade.

So let’s say it’s about the Euro for example, make sure it’s about the Euro so find out what exactly the analysts current bias is about the currency.

Find out how what he’s talking about in the article can maybe affect the currency going forward. And also try and find out how we think that’ll play out in the short or the medium term. That’s normally the articles that will provide the, most helpful information for you. When you do additional research. And when you do additional research is obviously good. You know, for, other reasons, it, it’s good for allowing you to view different perspectives from different angles.

So you might have investment bank A saying that they bullish on the Euro, but you might have investment bank B saying that they are bearish or the Euro. So it’s good to see that bullish and bearish, different biases and then seeing exactly why those banks, why those analysts have those different views, and to really help to solidify your own bias for a particular currency as well. A

nd of course, it gives you more context, and helps you to fill some of the gaps which you could basically use to, spot great trading opportunities. And like we said, over the squawk, when some significant, events happen.

So is it a must to do additional research? Not at all. Would we recommended it? Definitely.


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