Forex market depth and trend before the news
How do I know the direction and depth of the market before news are released? Thanks
Market depth data is the comparison of all limit-based orders available from Forex broker’s clients and the spreads of their liquidity providers (banks, other brokerage companies etc.)
Market depth data will only be available if you trade with an ECN Forex broker.
Still, there is no unified way to determine the true market depth of Forex. Forex is a decentralized place, it has no fixed centralized exchange, where all data could be gathered. Thus, it is impossible to gauge the true market depth in currency trading.
The direction of the market - the trend, on the other hand, can be determined.
Switch to the daily charts to identify the main trend. It should be seen without any indicators. However, if you prefer to get a help, simply add a moving average - 50 SMA.
50 SMA sloping down suggest a downtrend; moving up - uptrend; lying flat - ranging market. In case with a ranging market, seek the answer about the market trend from the higher chart - weekly chart.
Trading news is recommended in the direction of the main daily trend.
Review Forex Economic calendar, in particular, the Forecast column to analyze market expectations. If after comparison of the forecast and previous data you get the same suggestion about the market direction as the daily trend, you can consider trading it.
GOOD DAY,IN THE FOREXFACTORY HOW CAN I IDENTIFY THE DIRECTION OF THE TRADE NEWS WHEN REALSES BUY OR SELL, I WHICH OF THE WEBSITE CAN SEE THE DIRECTION
In the Economic Calendar at Forexfactory there is a small pictogram-folder called "Detail" in front of each news. Click on it and you'll get an explanation of the news effect as well as links to commentaries from traders.
I have a question, what does this statement means?
"Check Market Depth to look for either a 2:1 imbalance favoring the BID or neutral bid/offer balance. "
Thank you.
It means make sure the volume of the bid is twice that of the ask before making a long move.
how to calculate the "MARGIN CALL"
Its not entirely true. There is a proprietary high frequency subscription service that offers over 500m in market depth and shows a full aggregated book. Orderbook fx i just subscribed to their service.