Understanding the various economic indicators is valueable to drifting success in forex that have daily fluctuation.
1) Current Events: Whether the economy of any particular country is showing decline or improvement can be detected from economic reports released at scheduled times by the government. When analyzing an opportunity to invest in the Forex, experienced Forex traders always focus on current events and the state of the economy as the top indicator. Unemployment figures, housing statistics and the current state of affairs all affect the prices of the Forex.
2) GDP: Another economic factor widely used when analyzing the Forex is the GDP or the Gross Domestic Product. This is the broadest measure of the economy of a country. The GDP is composed of the total value of all goods and services produced within any given country, usually measured in the one-year time frame.
3) Retail Sales Reports:This is not the sum of all retail sales, but is basically random samples from various retail stores throughout the country. It is considered the most reliable economic indicator because you can detect consumer spending patterns throughout the year from the retail sales reports.
4) The Industrial Production Report: This is another reliable economic indicator which shows changes in production outputs in industries such as factories, mines, and utilities. The report compares what is actually produced with the production capacity over a period of time. When a country is producing at its maximum capacity, this will definitely affect the Forex and is considered ideally positive for Forex traders.
5) CPI: The last but very vital economic factor is the Consumer Price Index or the CPI. This reflects the changes in consumer goods prices in 200 categories.
As you can see, the Forex is affected by many factors. Some are positive while others are negative. To make money trading Forex, you should understand them thoroughly and take these indicators into account for accurate Forex predictions.
Keep on learning and keep on making money trading Forex.