In the world of forex trading, there are no rules or restrictions against insider trading. Anyone who possesses information that is known only to a select few can and do trade that information in the forex market.

Publicly released news is disseminated to the various newswires. Any trader who has access to these newswire services can tap into that information and react accordingly in the forex market.

However, institutional players do get information that retail traders dont have. Institutional players have access to the order book and they may also know something that others dont through their contacts in the industry.

At times, this isolated news access may not translate into real market action if other players dont have that information. However, sometimes the news may give an unfair advantage to the institutional players. They may act on it before it becomes public. The efficient market hypothesis says that all publicly available information is immediately compounded into the prices. So insider information can be very valuable.

In nutshell, forex market is dependent on news. If there is no news, there will be negligible or little price movements in the market. Even if the currencies move based on the technicals, these technicals have been established previously by news or expectation of future news.

Now the market reaction to the news is staggered. The market reaction to the news is specific as it depends on both the type of medium that the news is transmitted on and the type of news that is being released.

The online news service relay the information to the computer monitors of the traders at almost the same time as the market event occurs with very slight delay. Most active traders get their information from these online market news services.

However, there are many other less active traders who feel they dont need real time news so they dont subscribe to these online news services. They rely on market commentaries written by analysts and published on websites or in newspapers. These traders may take time to react to the same news that may vary from a few hours to a few days to weeks. The market reaction can thus be staggered.

Staggered market reaction means that the market will react over time. Some part of the reaction will be immediate while the other part will be delayed and come in a few hours to days to weeks. Part Market reaction may be immediate within the first few second from those who receive real time news. Part market reaction will be more delayed reaction from those who obtain the same news hours or even days later.

Forex economic calendar is usually packed with an average of twenty economic news releases per trading day. The market reacts differently to different news. Some news may produce little or no reaction at all.

You have to be selective to what news to focus on as the market reacts to a varying degree in relation to the type of news that is released. During times of scheduled news releases, currency prices adjust very rapidly to the released data.

Forex market reacts to what of the news rather than the why. For example, the currency prices will move as the market reacts to the better than expected unemployment figures. The market will not have time to consider why the unemployment figures are better this month as compared to the last month. Trading is all about taking advantage of what of the news. If you are more concerned about the why of the news rather than what of the news than you should stop trading and become an analyst.

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