Trading Forex for a Living

Analysis similar to the stock market, traders in the foreign exchange market, relying on two forms: technical analysis and fundamental analysis. The same stock technical analysis in the foreign exchange market, through the analysis of charts and indicators. Fundamental analysis is a bit different – at the same time the company financial statement analysis, indicators of the country’s economic report and analysis, there is a large.

In order to analyze how much do you think a country’s currency is worth it, you need to assess the country’s economic situation, in order to be more effective monetary transaction. In this section, we will look at some of the major economic reports to help traders learn the economic situation of a country.

 

Gross domestic product (GDP)

Gross domestic product (GDP) is considered by many is the broadest measure of a country’s economic performance. It represents a country’s total market value of all finished goods and services produced in a given year. Most traders do not actually focus on the final report of the gross domestic product (GDP), but the two reports were issued a few months before the final GDP: GDP report and the preliminary report in advance. This is because the final GDP figures, often considered a lagging indicator, which means that it can confirm a trend, but it cannot predict the trend, which is very useful for investors to find a trend. Than in the stock market, the GDP report is somewhat similar to the profit and loss account of a listed company at the end of the report. Growth to investors and traders, during the occurrence of signs.

Industrial Production

Industrial production report, the monthly published by the Federal Reserve in the United States, the report measures, including close attention to the changes in this report, the production of factories, mines and utilities, the production activities of the estimated level of capacity utilization in the economy. This is the best for a nation to see the increase in the value of production and capacity utilization at a high level. Under normal circumstances, the capacity utilization rate in the range of 82-85% is considered to be “tight”, can increase the likelihood of price increases or supply shortages in the short term. Is usually interpreted as a “relaxation” of the economy this recession may increase the possibility of below the 80% level.

Retail sales

Retail sales are a very close attention to the report, the measure of the total receipts, or the dollar value of all goods sold in retail stores in a given country. The report estimated that the total sample data from retailers to sell goods all over the country. Because consumers represent more than two-thirds of the economy, the report is very useful for businessmen to measure the direction of economic development. In addition, because the data of the report is based on the previous month’s sales, it is a timely indicator, unlike GDP report is a lagging indicator. ‘s Retail sales report may be in the normal fluctuations in the market, so that the information in the report can be used to measure the pressure of inflation, the impact of the Fed’s interest rate.

The consumer price index (CPI)

The Consumer Price Index is an economic indicator, to reflect the economic changes in the price level, is a benchmark for measuring inflation. CPI basket of goods on behalf of goods and services in the economy, comparing every year around this basket year after the price changes. This report is one of the more important economic indicators, its release can increase volatility in equities, fixed income and foreign exchange markets. The inflationary impact of changes in the foreign exchange market is a key catalyst.

Economic Indicators

Economic indicators report detailing the economic performance of a country in a specific area. These reports are usually published by government agencies or private organizations regularly. Although there are a large number of policy factors can affect the performance of a country, directly measurable factors, these factors are included in these economic reports.

These reports will be published on a regular basis, so you can compare continuous changes of economic indicators. The economic report, the currency of the company’s earnings report or quarterly report usually has the same effect. In the foreign exchange market, like most markets, if the report happens deviate from the expected by economists and analysts, it may lead to large flows of currency prices.

Here are some of the major economic reports and indicators, fundamental analysis in the foreign exchange market. You may have heard of some indicators, such as gross domestic product (GDP), because these also have a lot of the stock market have a significant impact.