FX Traders frequently reference this data, which are important
measures of growth, inflation, and productivity, to assess the value
of a currency.
Through the use of these figures, countries can by
looked at more like companies - their values are quantitative
expressions of a country's well being much like the figures in a
company's quarterly earning report are indicative of its prosperity.
With these numbers, assessing a currency becomes more methodical.
Here are a few helpful hints about how to
maximize your use of these figures:
Start keeping an economic calendar on hand. Indicators
are usually released at given intervals with pre-set release
dates. Keeping track of when a figure will come out gives you
the advantage of foresight, allowing you to predict when rates
will experience the greatest change. You will start noticing correlations
between the figures.
Stay aware of which indicators are drawing the most
attention. The figures with the most eyes on them are the
most likely to trigger the largest shifts in price and volume.
The reason many trading techniques work is that there are large
numbers of traders following certain numbers and philosophies at
the same time. Know why certain figures are being followed and
you will be able to stay ahead of the game.
Make sure to buffer your quantitative assessments by keeping
yourself updated on the international news. It is important
to keep in mind that while these indicators usually carry the
most weight when it comes to assessing a country's economic
health, they may not be the only things affecting a change in a
currency rate.
Do not be tempted into short-tem trades based
on fundamental analytics. These fundamental assessments are
conducted to determine long-term strategies and positions. Placing
trades in the short-term basis, particularly in the case of establishing a position just prior to a numbers release,
is
considered an extremely risky proposition. Fundamental analysis aims for larger and more predicable profits by
relying on long-term positions. There are a variety of techniques to
manipulate short-term positions in technical analysis.
In order to avoid heavy
losses, short-term traders will often close positions or set
conservative stops on their open positions to minimize losses. As
any good trader would do, be sure to set reasonable stops.
Consider the money invested in Forex risk capital - be sure it
can survive a heavy loss.
Practice. Even for experienced equity traders, there
are unique qualities in the Forex market that demand some Forex
experience in order to draw out maximum profit. A few brokers
will allow you a limited free trial on their software to let you
get a feel for the market. Check the Forex
Brokers section for details.
Listed along the left are links to
the major economic indicators. Click on an indicator of interest to
be taken to its information page.
