Foreign Exchange Trading – The Information That Must Be Taken Into Consideration
ECONOMIC INDICATORS
Economic indicators by far provide the most information of all the fundamental factors. Unlike the financial, political, and crisis factors, economic factors occur in a steady stream, at certain times, and more often. It is extremely important for you to be aware of these economic announcements so that you can to make informed decisions on entering, exiting, or adjusting your positions.
Traders around the world have their eyes glued to their monitors when economic data are announced, but knowing when these announcements are to be made is only half the battle. Forecasting the proper trend will generate true profits.
ECONOMIC DATA RELEASE
Economic data generally are released on a monthly basis, except the gross domestic product (GDP) and the employment cost index (EC1), which are released quarterly. While several indicators are released weekly, very few have an impact on the FOREX. All indicators are announced in pairs.
The first number is the new number, and the second one is the pervious number for comparison. It is important to remember that most reports are released between 8:30 and 10:00 a.m. (EST).
SOURCES OF INFORMATION
Information about upcoming economic indicators is available in all the leading newspapers, such as the Wall Street Journal, the Financial Times, and The New York Times. While newspapers are a great resource, it seems that the Internet is still where many traders turn for information. Trusted Web sites include http://money.cnn.com, http://www.bloomberg.com, and http://moneycentral.msn.com/investor/homc.asp. Another good source is to go to the New York Federal Reserve Bank Web site at http://www.ny.frb.org/. All have economic indicators and a calendar for upcoming announcements.
THE GROSS NATIONAL PRODUCT (GNP) AND GROSS DOMESTIC PRODUCT (GDP)
The GNP is said to be the most significant economic indicator, and many analysts agree that it strongly measures economic performance as a whole. GNP is the sum of all goods and services produced by U.S. residents both in the United Slates and abroad.
On the other hand, the GDP refers to the sum of all goods and services produced in the United States by both domestic and foreign companies. The GDP figures arc more popular outside the United States.
What do you think, is it easy to comprehend so much information if you are new to forex? Of course not. You need to understand that you will have to analyze tons of information. Are you ready to do that?
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