There are three types of traders on the foreign exchange market, those who use technical analysis, those who use fundamental analysis and those who combine the two. The fundamental forex live traders utilise forex news as indicators of when to trade and traditionally hold long-term trades. As they use these prolonger timeframes it is often easy for this trader to schedule a weekly routine. Effective traders are those with discipline and routine so it is natural that one who is able to plan a weekly schedule would be successful.
The beginning of the week
Contrary to popular belief, the beginning of a fundamental forex live trader’s week is not when the forex market opens but the day before. This is due to him/her having to complete various activities in preparation for the working week. The first activity is discovering when the forex news releases will be presented. This is most easily done via the use of an economic calendar. Traders who act on the spot market will utilise currency pairs when trading. It is important that this, and technical traders who use aspects of fundamental analysis, focus on the news releases that are relevant to their currencies exclusively.
Once this has been completed the trader must determine whether or not he/she will be trading on the high impact news or if he/she will be riding on the smaller news items. By trading on smaller news items one can make short-term profits. It is possible to trade on both types of news releases, however this does require a great deal of preparation before the trade. When the forex news releases have been identified the trader will be required to conduct some analysis.
The analysis done pre-working week is only a preliminary form as the market movements have not yet been noted and thus there is no basis for true analysis. This means that one should not try and establish any entry or exit points as the market conditions may be different when the time to trade arrives.
Pre-forex news release
In addition to the pre-working week activities, there are further tasks which must be completed before any forex live news items are released. The fundamental traders are required to utilise some technical analysis in determining accurate entry and exit points for the trade. This assists in the positioning of risk management measures such as stop loss orders ensuring they do not experience drastic losses should the trade turn bad. It is imperative to conduct this analysis if the trader is to be effective during trading.
Another important activity to complete during this stage is confirmation that there are no open trades which can be affected by the pending news items. If one has open trades they must be closed or ensured that they will not be influenced by any forex news.
Post-forex live news release
There are certain fundamental traders who prefer to take the first positions after the forex news items are released. There are also other traders who prefer to wait until the surge of traders has passed to gain a better view of the market and opportunities. The latter traders do this as the first surge may be a false trend which may reverse into a true trend. This may cause the impulsive traders to stop out and lose their ‘edge’ on the forex market.