While starting trading in the Forex market, it is necessary to learn how to precisely predict price movements.
Generally, there are two main types of analysis that could help you with this task. One of them is technical analysis which is concerned with the exact charting of price movements and markets. And the second one is fundamental analysis.
In fact, fundamental analysis is considered to be less accurate, but it goes much more deeply into the cause of currency movements. Traditionally, it involves a great variety of different factors like government policies, political situation in the county, different company’s takeovers and even some natural events like floods and earthquakes.
Among all the factors that are studied in the fundamental analysis, some of them are exact or at least provide better information for the Forex trading than economic indicators. In fact, these are sets of economic statistic data that are published on a regular basis by private or government sector agencies. While taken together, they could help you to judge fairly accurately how the country’s economy is doing.
For sure, there are a lot of economic indicators that are used in any given country. They could be divided into lagging indicators and leading indicators. Leading indicators traditionally take place before major changes in the economy become apparent, thus could be used in order to signal that these changes are taking place. In its turn, lagging indicators signal that the changes are already have happened.
In the USA there are some leading economic indicators that are considered to be very important for the Forex market. Among all of them, the following could be outlined:
- Gross Domestic Product (GDP)
It represents the monetary value of all services and goods that are produced by the economy over a certain period of time. In the America it is published on a quarterly basis. Traditionally it includes the pace at which the country’s economy is growing.
- Consumer Confidence Index (CCI)
In America it is published on a monthly basis and is seen as a great market mover. In fact, it is looked at closely by the Federal Reserve while determining interest rates.
- Consumer Price Index (CPI)
This index is published on a monthly basis. It is also seen as a main market mover and very important indicator of economic health.
- Non-Farm Payroll (NFP)
It is published on a monthly basis as well as records all the changes in the numbers of employees apart from government, farm and private household workers. In fact, it represents near 80 per cent of the American producers and is considered to be one of the greatest marker movers as well.
- Purchasing Managers Index (PMI)
It is the index of manufacturing conditions in the USA. It is considered to be extremely important, especially the section that deals with the growth in some new orders.
As in every other sphere of life foreign exchange market needs some education.
Surely, you can start forex trading and be quite successful in it. However sooner or later the losses will come. This is when one might think “Why didn’t I start with a good forex book?”
That does not mean that after reading even the best materials you will start closing trading positions with huge income, but this knowledge will save you from many traps. And even if you decide to get the help of a forex managed account service, still you will make a much wiser decision.
And some general tips – today the online technologies give you a really unique chance to choose what you need at the best terms which are available on the market. Funny, but most of the people don’t use this opportunity. In real practice it means that you must use all the tools of today to get the information that you need.
Search Google or other search engines. Visit social networks and check the accounts that are relevant to your topic. Go to the niche forums and participate in the discussion. All this will help you to build up a true vision of this market. Thus, giving you a real chance to make a smart and nicely balanced decision.
And also sign up to the RSS feed on this blog, because we will do the best to keep this blog tuned up to the day with new publications about Forex market.
