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A Catalyst is a news or economic event that influences traders to buy or sell an asset quickly.

This generally prompts a change in value of that asset, and often times, at a higher pace than the asset’s normal volatility range.

A catalyst can really be anything, but for forex traders, catalysts tend to come from monetary policy news/changes (e.g., interest rate changes, quantitative easing), economic updates (e.g., changes in employment, inflation, GDP, etc.), and geopolitical updates (e.g., Brexit).

Identifying and understanding catalysts are a key component to a trader’s skill set as trading opportunities only come from when markets are moving, and from understanding when a directional bias may change.

Monetary Policy

Monetary policy refers to the actions taken by a nation’s central bank to influence the availability and cost of money and credit to Read more

Kathy Lien

Kathy Lien is an expert in global currencies, author, and Managing Director of BK Asset Management. For retail FX traders back Read more

European Parliament

The European Parliament is the European Union’s law-making body. It is directly elected by EU voters every 5 years. It is a Read more

Open Position

An active trade that has yet to be closed.

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