Track Course Progression:
18a - Central Bank Analysis Resources
Now that we know how to interpret what the central banks are concerned with and the indicators they follow, the next question becomes; how do we find this information so that we can follow along with what the central banks are thinking on a day to day basis?
Institutional trading firms use a variety of tools that are all designed to get potentially market moving news and information to their traders in the fastest way possible. Some of these tools mucho $$ which we won’t discuss here. However, there are some very good free resources available which we will have a look at now.
In this Article:
- Forex Live
- Central Bank News Info
ForexLive is probably the best and fastest free resources available anywhere online for FX traders. Even if you have big bucks to buy premium tools you should still check out this site daily.
One of the main benefits of Forex Live is the analysis that is provided in the articles. This analysis not only gives you the information that you need but it also gives interpretation from some really good and well respected analysts in the FX industry.
Forex Live employs some rock star analysts and traders so that you know the information you are getting is going to be useful to your trading. Having this analysis gives us a much faster filter when compared to other resources such as Bloomberg. Plus you get the added advantage of the expert analysis.
For example, if you are trading GBPUSD and it suddenly moves sharply higher, you don’t have to wait five or six hours for Bloomberg to publish an article about the move. Forex Live is typically much faster and will post articles only a minute or two after an event allowing you a more up to minute picture of what is going on in the Forex market.
These analysts have access to some of the more expensive tools that the large institutional players have. This helps level the playing field a bit and helps get market moving information to us readers of Forex Live quickly.
ForexLive is Forex specific as is implied in their name. They also have a dedicated central bank filter allowing you to look at central bank specific news. This can help speed up the process of getting in tune with the market.
Another thing that is awesome about Forex Live is that they have a session recap of all the important things that took place during each of the three trading sessions (Asia-Pacific, London, New York). So all you have to do is scan the latest session recap when you start to trade in the morning and you are up to date and tuned into the market in 10 minutes.
When you go to the Forex Live website it will typically prompt you and ask if you would like to receive push notifications. Say YES! If the website doesn’t do this then disable your popup blocker and figure out how to get these push notifications to your desktop.
Whenever ForexLive posts any new article you will get a desktop notification in the bottom right hand corner of your screen showing you a snapshot of the headline. This is great because they are extremely fast at delivering the latest economic numbers when they hit the wires. They sometimes are only a second or two behind which is amazing for a free resource.
If you only want to use one resource then learn Forex Live inside and out. It is invaluable.
Bloomberg is a very well-known and famous resource for almost all market related information. Bloomberg’s currency section is a great resource for us Forex traders.
One other thing to be aware of with Bloomberg is that it’s not the most time sensitive source of information. The articles are typically very well written by industry wide well-respected analysts, but the articles are not released 2 minutes after a major market moving event has taken place.
Bloomberg is a better resource to find out what happened in great detail when you were sleeping or if you were not at your trading desk for several hours. The information is great but sometimes great information takes a little more time.
What are we looking for? All we need to do is scan through the headlines and read the articles of the most interest to us from the currency section.
We are looking for 4 things when reading an article:
- The currency pair: This will most likely be identified in the headline of the article but sometimes it might be in the first paragraph.
- The direction: Is the currency pair going up or down? This is also typically in the headline of the article.
- The reasons for the move: The headline will typically give the reason but you might have to read through the article to find out the nitty gritty details for the reasons behind the move. There is always a reason for a move in the currency market and that reason is usually what the article is all about.
- Analyst expectation: What are the analysts expecting to happen in light of the reason for the recent price move? This will give us an idea of which prices are important and what we should pay attention to. The analyst is not always going to be right but at least we are sure to be in tune with the same information that the rest of the market has as well. Sometimes the analyst will give a timeline which is also useful information to have.
If the article does contain these 4 items then there is something in there that we can potentially trade from. Scanning through articles in this way will give us the best points from each article with the best trade ideas. It also keeps us focussed on the currencies that are sure to have lots of price action and trading opportunities because if it’s in the news then it’s probably moving quite a bit. The last thing we want to do is trade a currency that has nothing driving it. This is when currency traders get chopped up in sideways messes.
Central Bank News Info
This is a good source to keep directly tuned into what all the central banks are currently doing because the site is dedicated to delivering central bank specific news. It is not super quick like Forex Live, it’s closer to Bloomberg in speed but the articles are very informative.
The first thing to do is familiarize yourself with all the tabs at the top of the screen. Do you want to know what the interest rates are for pretty much every country on earth? Click the “Interest Rates” tab and you will get everything you need. Do you want to when all the central bank interest rate decisions will be released for the entire year? Click the “central Bank Calendar” tab.
Go through each tab and learn about what other countries are doing. There is some very interesting insights to be gleaned from this process.
The articles that this site publishes are great sources of information on all things related to the central banks and it’s worth keeping it on your list of go to sites. This site also highlights related articles from several different resources that you may not come across in your own personal research.
Boom! There you have it. Those are the top 3 free resources we are aware of. Next we will take a look at some additional resources that you might enjoy as well.