Each currency pair is built around how strong the economy is for that country. This can change from day to day with the different news that comes out for the countries currency. When trading the forex you need to be aware of any news that is pending for that day or week. Most new traders do not take that into account when placing trades. If you are a short term forex trader this can cost you in the long run.
The forex market is the worlds largest market to trade so due diligence is most important. Each country can adjust their currency prices to reflect the supply and demand for their products. When you are trading and watching your charts news can effect the supply and demand for that forex pair. If you are using a candle stick chart you will see how the candle turns green as buyers enter the market. The same is true when you see a red candle that means sellers are selling the currency pair. If the news is bad the sellers will start to sell and produce red candles on your charts.
A successful forex trader will keep informed on each pairs economic news and various reports that can effect the pairs trading range. All these factors need to be taking into consideration to make money in the forex markets. You need to understand how the currency pairs react to news. This will help you preserve your trading capitol and make you profitable. It is well know that the fx markets trade 24 hours a day. You need to stick with a few pairs and get to understand how they move and trend with different news releases. You should check to see what time of day has the most volume since the markets are 24 hours.
Usually the forex markets are the most active during the New York session,European session,and the Tokyo session. You can find the different time zones on most forex brokers web sites. You can also visit their forums and traders from around the world will be in the forums discussion various currency pairs to trade. By doing some research you will be more profitable and make less risky trades. If you are just starting out trading the forex markets you need to watch for news and have a trading plan written down. At first I would recommend you not take any trades during news releases. You should wait until the pair has settled down and the spreads on your trading platform have returned to normal. Remember "the trend is your friend" when it comes to trading the forex markets.