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Forex Encyclopedia How to Use the News to Gauge Market Sentiment

{}Posted in2023/2/25 5:35:28 | 7Browse

As you probably know, I dont follow the best forex rebate company bestforexrebatecompany frankly, most of it bores me to death Not only cashback forex, but follow forexrebatecommissiong the news brings with it a lot of mixed signals that can put you in a constant state of numb analys fxrebatecentral That said, as a price action trader, the news can be of great benefit to you, but you have to know how to use it wisely It What is the appropriate way, you may ask? This is exactly what I will explore in this lesson By the time you finish reading this article, you will know how to use the news to gauge rebatesforexbroker sentiment This will allow you to determine the strength of the market so you will know whether to follow the trend or go the other way Lets get started How the news affects price action Before we go into detail, it is important to first understand how the news affects the forex market Without the news, the The forex market would not be eventful, at least not in the form we see it In fact, this is true of any financial market In a given market, news affects peoples bullish or bearish sentiment, and traders therefore buy and sell which in turn creates volatility As price action traders, we are less interested in knowing the outcome of these news events than we are in knowing how the market reacts to these outcomes The way the market behaves after a major event can tell us whether the market is bullish or bearish for a particular currency pair Its not just as simple as a bearish news currency falling and a positive news currency rising, its far more complex Reading sentiment If you want to be consistently profitable, being able to read the sentiment in the market is very important For price action traders this is not something The pin candles we use, or even the bull or bear engulfing main line, are just another way to measure market sentiment What Im going to show you is another way to measure the strength of the market, is to use the news I want to point out that we dont use the market itself to enter and exit the market and should never use this as a trading strategy, but rather as a way to judge the strength of a trending market way So how do I do it exactly? By watching how the market reacts to news events that have a significant impact For events that have a significant impact, many economic calendars are marked red I use these types of economic calendars and I use them daily when trading in the market for advice on how to configure the calendar and how to make it work to your advantage, see my previous article Lets say you are watching the GBPUSD in an uptrend and looking for buying Opportunity or you may already be long and want to increase your position using a pyramid trading strategy By watching how the GBPUSD reacts at the next GBP news release, you can get an idea of how the market is feeling about the GBP Remember, you only focus on economic events marked in red that have a significant impact on the market The following shows a few different scenarios in an uptrending market and the market sentiment each time an uptrend Market Sentiment in the Market As you can see from the table above, if the news is negative or neutral, but the market continues to rally, this means that the sentiment against that base currency is bullish If the news is negative, but the market moves higher, this is especially true This is the true power of using news to measure market sentiment A market that experiences negative or neutral news and continues to rally is a bullish signal This indicates The control is in the hands of the buyers, so the trend may continue to experience positive or neutral news on the downside of the market trend continues, which indicates that the market slump is back to a rebound example, below are charts showing how to use news results to determine market sentiment The real advantage of using news in this way is that you get negative news on a currency pair, while the pair is rising again when this is in the first chart above There is something to show that it can be advantageous, because in contrast to other charts, this one is more extreme and has unexpected results A currency is expected to depreciate on negative news, but if the currency appreciates in the context of negative news, then that means the overall sentiment for the currency is toward the extreme bullish Now, lets look at how positive news can help us in the upside With regard to positive news in an upside market, we can see that the market responds in a bullish manner so if the market rallies on positive news, then the currency can be considered bullish On the other hand, if the market consolidates on the currency after positive news is released, this would be considered slightly bearish This is because we expect positive news to cause the base currency to If it does not appreciate, this indicates that buyers may be hesitant to continue buying, which is a warning to you if you are considering going long Finally, if the upside market experiences positive news and the base currency depreciates, then this indicates that buying has dried up and the short side may gain control This indicates a potential reversal in the market ConclusionThe ability to read forex market sentiment using news events that have a significant impact Many technical traders believe that they dont need to pay attention to the news to a certain extent, and I think this is true. However, paying attention to how the market reacts to news events is a very fundamental element of price action trading and should not be ignored Remember, it is important to analyze and even understand the outcome of a particular news event and what the trending market does to the outcome. When you start using news to gauge market sentiment, there are a few things to keep in mind: The outcome of news events is what creates volatility in the forex market As a price action trader, you are not concerned with understanding the outcome of news events, but rather with how the market reacts to the outcome Must only pay attention to news events that have a significant impact The most telling signals are the unexpected ones --The market is still rebounding after experiencing negative news upside Although using news to gauge market sentiment is a very powerful tool, price action strategies should not be used alone and other influencing factors should be used in combination to accumulate favorable factors
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