Forex Trading: brexit news
As you might know in 2019 the UK will be leaving the European Union. If there is one thing that is about to shake the forex trading charts it’s brexit news. So today and I didn’t exactly ask for this: Trading forex: brexit news.
What is the Brexit?
Brexit is an abbreviation of Britain and exit. The UK has voted and the outcome was that the will be leaving the EU or at least they are trying to do so.
I will not bother you with the reasons why the UK is leaving but the impact is big, very big. It has simply never happened before and no one knows exactly what is about to happen.
Why is the brexit important to forex trading?
Well the Brexit is big news and forex traders (the big banks and institutional traders) don’t like uncertain times. That is exactly what the Brexit is causing: uncertainties.
The big banks make the prices move and as a result any Brexit news is important and a response can be seen in the forexmarket like today.
What forex pairs will respond?
You can never be certain about what pairs will respond to Brexit news but any GBP pairs will be very likely to respond.
So what Forex happened today??!?
Brexit news is what happened. Unexpectedly over 5 members of cabinet in the UK left, because they didn’t agree with the Brexit terms. And the pound value dropped. This news did not only affect the British pound, the euro also dropped in value but way less then the GBP.
The drop was large and probably caused by bigger banks selling the pound as a result of its future being so uncertain.
Do you trade the brexit news?
Well this was ‘real’ news. No one saw it coming and it isn’t like the monthly interest rate statements or non-farm payrolls, so I was in a few forex trades. As always, all of them had a stoploss in place and some took profit.
Normally I don’t trade the news. I don’t take positions based on the coming up news or numbers. I do trade during most most news events but I follow my trading plan and don’t even take the news or numbers in consideration.
Trading the news
Trading forex news means that you become a fundamental trader. You take positions based on coming up (brexit) news. I’m not a fundamental trader and take trades based on technical analysis, that’s what traders call a technical trader.
Should you trade the brexit news?
Well I can’t tell you what to trade and what not but always make sure you have a stoploss in place because trading forex might mean trading forex with brexit news.