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Can I trade on high impact news?
Can I trade on high impact news?
UWM Support Team avatar
Written by UWM Support Team
Updated over a week ago

Indeed, you are allowed to engage in trading during high-impact news events in both the Assessment (both DEMO and LIVE) and Express Programs.

What is a high impact news?

In the forex market, "high impact news" refers to economic news releases or events that have the potential to significantly influence currency exchange rates and market volatility. These events are closely monitored by traders and can lead to rapid price movements. High impact news events are typically characterized by their potential to impact not just the forex market but also other financial markets.

Common examples of high impact news events in forex include:

1. **Central Bank Interest Rate Decisions**: When a central bank announces changes in its key interest rates, it can have a profound impact on a country's currency. Higher interest rates tend to attract foreign capital and can lead to a stronger currency, while lower rates can have the opposite effect.

2. **Non-Farm Payrolls (NFP)**: The U.S. NFP report, released monthly, provides data on job creation and unemployment. It's considered a major indicator of the U.S. economy's health and can lead to significant market movements.

3. **Gross Domestic Product (GDP) Releases**: GDP reports indicate the economic health of a country. Better-than-expected GDP figures can boost a currency's value, while weaker-than-expected figures can lead to depreciation.

4. **Consumer Price Index (CPI)**: CPI measures inflation. A high CPI can signal rising prices, which may lead a central bank to consider tightening monetary policy, affecting the currency's value.

5. **Political Events and Elections**: Political events, such as elections, can introduce uncertainty and affect a country's economic policies, leading to forex market volatility.

6. **Trade Balance Data**: Trade balance reports provide insights into a country's imports and exports. A trade surplus (exports > imports) can strengthen a currency, while a trade deficit (imports > exports) may weaken it.

7. **Geopolitical Events**: Events like conflicts, international agreements, and diplomatic relations can impact forex markets by affecting investor sentiment and risk appetite.

8. **Natural Disasters**: Severe natural disasters can disrupt economic activity in affected regions, potentially impacting currency values.

It's essential for forex traders to be aware of the economic calendar, which provides a schedule of upcoming high impact news releases and events. Traders often take precautions, such as using stop-loss orders, reducing leverage, or avoiding trading altogether during such events, as the market can become highly unpredictable and volatile.

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