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Forex Trading |
Written by Finexo.com |
Friday, 06 November 2009 08:39 GMT
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Knowing what the data means can help you make smarter trades, before
and after the data is released. Below are some of the primary pieces of
data that successful Forex traders follow.
What are the Key Indicators?
Forex Traders can gauge the financial health of a given country (and
its currency) through its economic data. But, just like a doctor
monitoring a patient's vital signs, the information is not equal in
terms of its impact. Here's a primer of the key economic indicators
that often impact currency traders.
Economic indicators divide into leading and lagging indicators:
Leading indicators
are economic factors that change before the economy
starts to follow a particular trend. They're used to predict changes in
the economy.
Lagging indicators
are economic factors that change after the economy
has already begun to follow a particular trend. They're used to confirm
changes in the economy.
Major Economic Indicators
Gross Domestic Product (GDP)
The sum of all goods and services produced either by domestic or
foreign companies. GDP indicates the pace at which a country's economy
is growing (or shrinking) and is considered the broadest indicator of
economic output and growth.
Industrial Production
A chain-weighted measure of the change in the production of the
nation's factories, mines and utilities, industrial production also
measures the country's industrial capacity and how fully it's being
used (capacity utilization).
The manufacturing sector accounts for one-quarter of the major
currencies' economies, so it's critical to watch the health of
factories and whether their capacity is being maximized.
Written by Finexo.com |
