The role of psychology is enormous - Part 3

"After the sharp drop, which followed the release of the voting results, the British FTSE 100 index rebounded to a maximum since the beginning of 2016. The huge jump, but nothing has changed in the economy. Even there is no certainty whether the UK is going to leave the EU at all. But "fear index," which jumped 52% after the announcement of a referendum results in the UK, then fell sharply. As if there wasn't a referendum", - says Vladimir Miklashevskii.
The last few weeks have shown why it is important to know how to trade the news, said Ryan Littlestone, analyst at ForexLive. "News from the central banks, economic indicators and "the talking heads" - those are some of the components of news affecting the trade. Trading on news and data is never black and white. Data exceeding the expectations are not always good news. The statement, which was ignored, the next day can have a key role. Knowing when news are important, and when not, can immensely help traders", - says the expert.

The role of psychology is enormous - Part 2

"Other Central Banks already follow the Fed. From general to specific. If the manipulation of the stock market is still possible for individual stocks (the so-called inside, for example), with the world's currencies it is practically impossible because of the huge volumes. For a one-time impact on the big ten currencies is needed a strength from a Central Bank (such as intervention by the Bank of Japan, the quantitative easing by the ECB, the Fed)", - says Vladimir Miklashevskii.
A recent example of excessive emotionality of the investors became market reaction to the referendum on Brexit. Very interesting is the reaction on the British stock index, as well as the so-called "fear index" S&P 500 VIX (volatility index market of the Chicago Board Options Exchange, which reflects the investors' expectations regarding the US market).