Forex Trading - Economic Indicators in Fundamental Analysis

Forex or currency trading can be analyzed and traded using two methods. One is technical analysis and another is fundamental analysis. This article will focus on fundamental analysis.

Fundamental analysis refers to trading forex based on the economic and political performance of the country as these two factors generally influence the exchange rate. Fundamental traders use a variety of news and economic indicators to support their decisions in trading. The news and numerical indicators are usually announced or published by the government or experts at certain period intervals such as monthly or quarterly. With the availability of internet, these indicators are easily accessible and hence, traders are able to react to the news faster.

There are many numerical indicators available and some have marked influence on the market price while others affect the exchange rate moderately and some even less. The effect of those indicators that highly influence the currency market can be observed in the price chart after the release of the indicators or news. Upon release, there is a catalytic effect leading to a high and rapid fluctuation of the currency market.

Listed below are some of the indicators that notably affect the economic growth and inflation that in turn, influence the exchange rates:

• Gross Domestic Product (GDP) - this indicator represents the monetary value of all products and services generated in a country over a specified period of time. It is considered the greatest indicator of a country's economy. This information is released on the last day of the quarter, 8.30am EST by the Bureau of Economic Analysis.

• Non-Farm Payroll (NFP) - this is one of the statistics included in the employment report. The report details information such as pay roll, unemployment and job growth. NFP is regarded as the most important due to its significance to the economic growth and inflation. This report is released by the Bureau of Labor Statistics on the first Friday of every month at 8.30 EST.

• Consumer Price Index (CPI) - this index is used broadly as a measure of inflation. It is considered as an indicator on the effectiveness of government policy. A rise in CPI signifies inflation while a fall denotes deflation. This piece of news is usually released by Bureau of Labor and Statistics around the 20th of each month, 8.30am EST.

• Retail Sales - it is a significant measure of consumer spending based on the data supplied by the retail stores on the monetary values of the merchandise sold as well as their inventories. This data is published by Bureau of Census around the 12th of each month, 8.30am EST.

There are many more indicators such as Purchasing Managers Index, Industrial Production, Consumer Confidence Index, Trade Balance and Housing Starts which are released on different day of the month and therefore providing ample opportunities to trade forex based on fundamental analysis.

Read more...

Forex Trading - Economic Indicators in Fundamental Analysis

Forex or currency trading can be analyzed and traded using two methods. One is technical analysis and another is fundamental analysis. This article will focus on fundamental analysis.

Fundamental analysis refers to trading forex based on the economic and political performance of the country as these two factors generally influence the exchange rate. Fundamental traders use a variety of news and economic indicators to support their decisions in trading. The news and numerical indicators are usually announced or published by the government or experts at certain period intervals such as monthly or quarterly. With the availability of internet, these indicators are easily accessible and hence, traders are able to react to the news faster.

There are many numerical indicators available and some have marked influence on the market price while others affect the exchange rate moderately and some even less. The effect of those indicators that highly influence the currency market can be observed in the price chart after the release of the indicators or news. Upon release, there is a catalytic effect leading to a high and rapid fluctuation of the currency market.

Listed below are some of the indicators that notably affect the economic growth and inflation that in turn, influence the exchange rates:

• Gross Domestic Product (GDP) - this indicator represents the monetary value of all products and services generated in a country over a specified period of time. It is considered the greatest indicator of a country's economy. This information is released on the last day of the quarter, 8.30am EST by the Bureau of Economic Analysis.

• Non-Farm Payroll (NFP) - this is one of the statistics included in the employment report. The report details information such as pay roll, unemployment and job growth. NFP is regarded as the most important due to its significance to the economic growth and inflation. This report is released by the Bureau of Labor Statistics on the first Friday of every month at 8.30 EST.

• Consumer Price Index (CPI) - this index is used broadly as a measure of inflation. It is considered as an indicator on the effectiveness of government policy. A rise in CPI signifies inflation while a fall denotes deflation. This piece of news is usually released by Bureau of Labor and Statistics around the 20th of each month, 8.30am EST.

• Retail Sales - it is a significant measure of consumer spending based on the data supplied by the retail stores on the monetary values of the merchandise sold as well as their inventories. This data is published by Bureau of Census around the 12th of each month, 8.30am EST.

There are many more indicators such as Purchasing Managers Index, Industrial Production, Consumer Confidence Index, Trade Balance and Housing Starts which are released on different day of the month and therefore providing ample opportunities to trade forex based on fundamental analysis.

Read more...

A Good Forex Currency Trading System - Trade These Economic Indicators

It seems everyone is looking for a good forex currency trading system. Well before jumping into the big time it is important to lay a foundation. Before we get into currency trading system let's start with looking at what drives the currency market. Let's look at a list of economic indicators. It may not be fun but I can assure you that a good working knowledge of these indicators (used in the USA) will help you in the long run and allow you to fully utilize your forex currency trading system to the fullest potential.

It is important to remember that the numbers are not as important as the anticipation of these numbers, this drives the market. When you learn how to use these indicators you will also improve your currency trading system.

Let's take a look at a few of these with a brief explanation. This is part one of an ongoing series

CCI - Consumer Confidence Index

The Conference Board; Last Tuesday of each month, 10:00am EST, covers current month's data. The CCI is a survey based on a sample of 5,000 U.S. households and is considered one of the most accurate indicators of confidence. The idea behind consumer confidence is that when the economy warrants more jobs, increased wages, and lower interest rates, it increases our confidence and spending power. The respondents answer questions about their income, the market condition as they see it, and the chances to see increase in their income. Confidence is looked at closely by the Federal Reserve when determining interest rates. It is considered to be a big market mover as private consumption is two thirds of the American economy. If you are looking for an effective forex currency trading system, then using this report can make it even better.

CPI - Consumer Price Index; Core-CPI

Bureau of Labor and Statistics; Around the 20th of each month, 8:30am EST, covers previous month's data.

The CPI is considered the most widely used measure of inflation and is regarded as an indicator of the effectiveness of government policy. The CPI is a basket of consumer goods (and services) tracked from month to month (excluding taxes). The CPI is one of the most followed economic indicators and considered to be a very big market mover. A rising CPI indicates inflation. The Core-CPI (CPI, excluding food and energy, expense items which are subject to seasonal fluctuations) gives a more stringent measure of general prices.

In the next article we will look at the following economic indicators: Employment Report, Employment Situation Report, and the FOMC Meeting (Federal Open Market Committee): Rate announcement.

If you really want to improve your trading then be sure to click on the link below, you will be glad you did. Good luck trading.

Read more...

Forex Trading - How To Profit From Economic Indicators

The traders all over the world trade about $3trillion daily in the world foreign exchange markets. The markets are open all over the world 24 hours a day and keep on absorbing new traders every day.

Now if you were to make some sense of what is happening in the currency markets and why there are swings across currency trading combinations then you will have to pay heed to a lot of economic news. There are several economic factors that change the view of the traders towards a particular currency.

Almost anywhere you go the most common term that you will hear is the fed. Fed is short for Federal Reserve and this is the central bank of the United States. Now the chairman of the Fed always has the best interests of the economy so as to steer it clear of recession and help the people get respite from inflation. Any decision the fed makes an impression on how the US currency behaves. That said, you need to understand how each and every statement of the fed impacts the foreign exchange market.

The price of a currency is a factor of how the economy is shaping up. If the economy is not doing well, the price of the currency reflects that. The economic foundation of the country has to be sound for the currency to be strong. However whether you believe it or no, the currency traders pay particular attention to interest rates in the market and they are best indicators of the economic health of the country and also affect the general consumer market the most.

So read and absorb all economic news, listen to experts and then take a judgment call on the currency.

Read more...

Forex Trading - How To Profit From Economic Indicators

The traders all over the world trade about $3trillion daily in the world foreign exchange markets. The markets are open all over the world 24 hours a day and keep on absorbing new traders every day.

Now if you were to make some sense of what is happening in the currency markets and why there are swings across currency trading combinations then you will have to pay heed to a lot of economic news. There are several economic factors that change the view of the traders towards a particular currency.

Almost anywhere you go the most common term that you will hear is the fed. Fed is short for Federal Reserve and this is the central bank of the United States. Now the chairman of the Fed always has the best interests of the economy so as to steer it clear of recession and help the people get respite from inflation. Any decision the fed makes an impression on how the US currency behaves. That said, you need to understand how each and every statement of the fed impacts the foreign exchange market.

The price of a currency is a factor of how the economy is shaping up. If the economy is not doing well, the price of the currency reflects that. The economic foundation of the country has to be sound for the currency to be strong. However whether you believe it or no, the currency traders pay particular attention to interest rates in the market and they are best indicators of the economic health of the country and also affect the general consumer market the most.

So read and absorb all economic news, listen to experts and then take a judgment call on the currency.

Read more...

A Good Forex Currency Trading System - Trade These Economic Indicators

It seems everyone is looking for a good forex currency trading system. Well before jumping into the big time it is important to lay a foundation. Before we get into currency trading system let's start with looking at what drives the currency market. Let's look at a list of economic indicators. It may not be fun but I can assure you that a good working knowledge of these indicators (used in the USA) will help you in the long run and allow you to fully utilize your forex currency trading system to the fullest potential.

It is important to remember that the numbers are not as important as the anticipation of these numbers, this drives the market. When you learn how to use these indicators you will also improve your currency trading system.

Let's take a look at a few of these with a brief explanation. This is part one of an ongoing series

CCI - Consumer Confidence Index

The Conference Board; Last Tuesday of each month, 10:00am EST, covers current month's data. The CCI is a survey based on a sample of 5,000 U.S. households and is considered one of the most accurate indicators of confidence. The idea behind consumer confidence is that when the economy warrants more jobs, increased wages, and lower interest rates, it increases our confidence and spending power. The respondents answer questions about their income, the market condition as they see it, and the chances to see increase in their income. Confidence is looked at closely by the Federal Reserve when determining interest rates. It is considered to be a big market mover as private consumption is two thirds of the American economy. If you are looking for an effective forex currency trading system, then using this report can make it even better.

CPI - Consumer Price Index; Core-CPI

Bureau of Labor and Statistics; Around the 20th of each month, 8:30am EST, covers previous month's data.

The CPI is considered the most widely used measure of inflation and is regarded as an indicator of the effectiveness of government policy. The CPI is a basket of consumer goods (and services) tracked from month to month (excluding taxes). The CPI is one of the most followed economic indicators and considered to be a very big market mover. A rising CPI indicates inflation. The Core-CPI (CPI, excluding food and energy, expense items which are subject to seasonal fluctuations) gives a more stringent measure of general prices.

In the next article we will look at the following economic indicators: Employment Report, Employment Situation Report, and the FOMC Meeting (Federal Open Market Committee): Rate announcement.

If you really want to improve your trading then be sure to click on the link below, you will be glad you did. Good luck trading.

Read more...