News. Economic news, political news, and commentary from monetary officials that is at odds with market expectations can all have a massive impact on price. Speculation is all about sentiment, and news can either reinforce that sentiment or completely turn it around.
One mistake that many novice traders make is assuming that all news is discounted in the price the moment it hits the computer screen. This is not true. The currency market is the largest, deepest, most liquid financial market in the world, trading more than $3 trillion[1] of volume a day. In this market, it is impossible for prices to adjust instantly to major news surprises. When large players such as multi-national corporations or multi-billion dollar hedge funds react to the latest changes in the economic or political landscape, price can sometimes take days to fully adjust to the new reality
One mistake that many novice traders make is assuming that all news is discounted in the price the moment it hits the computer screen. This is not true. The currency market is the largest, deepest, most liquid financial market in the world, trading more than $3 trillion[1] of volume a day. In this market, it is impossible for prices to adjust instantly to major news surprises. When large players such as multi-national corporations or multi-billion dollar hedge funds react to the latest changes in the economic or political landscape, price can sometimes take days to fully adjust to the new reality
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