Study on Forex Traders' Decision-Making: Risk-Taking or Risk-Avoidance Following Economic News Releases

This preliminary study analyzes the decision-making of forex traders following the release of economic news, particularly during periods marked by increased market volatility. Traders exhibit diverse behavioral responses. Some actively seek opportunities to capitalize on market fluctuations, while others adopt a more cautious approach to minimize potential losses. This study focuses on Generation Z traders, a demographic group known for their high digital literacy, adaptability, and strong presence on online trading platforms. Generation Z traders are characterized by rapid interpretation of information, strong technological skills, and a strong willingness to explore innovative trading strategies. The study also explores how psychological biases and market anomalies influence their decision-making processes. However, there is a paucity of empirical research on how Gen Z forex traders respond to economic news—whether they favor risk-taking or risk-avoidance—and on the roles of fundamental, technical, and behavioral anomalies in shaping their choices. Specifically, it analyzes the influence of fundamental anomalies, herding bias, technical anomalies, overconfidence bias, and risk perception. A quantitative approach, in conjunction with Partial Least Squares Structural Equation Modeling (PLS-SEM), was used to collect data from 40 active Indonesian Gen Z forex traders via an online platform survey in May 2025. The analysis shows that technical and psychological factors significantly influence the risk-taking decisions of Generation Z traders in a volatile, news-aware environment.