Trading community In this community we talk about Forex trading and binary options trading Tue, 08 Jul 2014 08:12:34 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.8 Topoption binary options broker review /70-topoption-binary-options-broker-review/ /70-topoption-binary-options-broker-review/#comments Wed, 19 Mar 2014 16:03:54 +0000 /?p=70 Owened by Safecap Investments Ltd., TopOption is a binary option broker, with one very important peculiarity: it is the first European broker and it doesn’t accept clients from the United States. All other countries from the world, such as Australia, Asia and Africa, (and of course Europe) instead, can enjoy the platform in the way […]

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Owened by Safecap Investments Ltd., TopOption is a binary option broker, with one very important peculiarity: it is the first European broker and it doesn’t accept clients from the United States. All other countries from the world, such as Australia, Asia and Africa, (and of course Europe) instead, can enjoy the platform in the way we are going to explain. For those that can have doubts on the professinality of TopOption, we can soon confirm that this broker is licensed and regulated by the Cyprus Securities and Exchange Commission (CySEC) that guarantees the safety and the security of the deposited funds. Moreover, it is also recognized by the Commissione Nazionale per le Società e la Borsa (Consob), that is one of the main European Supervisory Authorities (ESA). The security of sensible data is also guaranteed by the encryption software used, among the best in the world. So TopOption can be considered with full rights a professional on line broker. The platform. Let’s see something about the platform. The software used by TopOption is SpotOption, one of the most common in the world of the binary option.

Binary options broker

Topoption review

Such as the most brokers, Topoption interface looks very simple and easy to use. The different binary options and the expiring times are all well visible as well as the different available assets, that are more than one hundred-eighty (in currencies, stocks, commodities and indices). Because of the high risk in manage the binary option, the broker offers a lot of possibilities to study the methods and the world of the trading, so that eBooks, video tutorials and market reports are available on the site, such as the possibility to chat with a ‘tutor’ that can assists and helps the customer during the formation and during the trade. How to open an account and start a trade. It is very easy to open an account on TopOption platform. The minimum fund required is only one hundred United States Dollar (USD) that allows to open a Starter Account. Pro and VIP Accounts are also disponible for more experts investors: to open a Pro Account a deposit of one thousand dollars is required, while for a VIP one it is necessary a deposit of five thousand dollars. It is important to note that, even if the US clients are not allowed to trade on TopOption, the main currency to open the accounts remains the USD. To deposit money and to be payed, the most common credit cards are accepted together with the Wire Transfer, the Moneybookers, the Web Money the Liberty Reserve and the Neteller. The withdrawals are usually payed on the same account the deposit is made: TopOption withdrawals are free from fees even if some banks can charge for the service (so it is important that trders ask about this to their bank). After the account is opened, for those who are not very skilled in the trading, is possible to ask for a demo account, that allows to practize without any real risk. With the demo account is possible to trade just like a Starter Account, but using virtual money. And only when the investor feels ready, he can start for real.

What kind of binary options offers TopOption?

In addition to the classical ones, such as the High/Low, the Sixty seconds and the One touch, there are a lot of choices on the expiring time options, such as the ten minutes options as well as the fiftheen, the tirthy and the one hour option. And, moreover, end of the day, weekends, and end of the month option are available, too. Some more trade options that this broker supplies and that are less common to find, are the Stock Pair, the Double up and the Sell Option. So the trader can choose their option depending both on the risk they want to run and, of course, on the competence they have. In fact, for those more skilled (and somethimes for the lucky ones) the payout can reach profits up to eighty-five per cent. All the trades can be done both on pc or on mobile devices, as TopOption broker run on several operative systems, such as iOS (for iPhone), Android, Mac OS and Windows. And are available in some of the most spoken european languages, such as English, Italian, French, German, Spanish, Czech, Polish and Russian. As regards the not european languages, both Arabic and Japanese are available.

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Forex money management tips /65-forex-money-management-tips/ /65-forex-money-management-tips/#comments Sat, 15 Mar 2014 10:14:50 +0000 /?p=65 Money management in Forex trade is what distinguishes somebody who is experienced in this trade and an amateur. Despite the fact that traders know the importance of money management very few of them actually practice. The laborious nature of this task and the fact that it requires a lot of attention makes most traders shy […]

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Money management in Forex trade is what distinguishes somebody who is experienced in this trade and an amateur. Despite the fact that traders know the importance of money management very few of them actually practice. The laborious nature of this task and the fact that it requires a lot of attention makes most traders shy away.
Trading Forex needs strict money management; it is what differentiates this trade with gambling. Managing money well is the only way that a trade can make money, there are no two way about it. Doing it any other way will lead to disastrous effects such as getting a small profit margin or even going at a loss. This stresses on the need to have good money management skills in this trade.

Money management tips

It is important to know that when trading money there are chances that will win some money, or may loose. Losing money in this trade is normal, therefore one should not be discouraged, and it is part of the game. It also at times happens to those who have been in this trade for long and have the necessary skills and experience. Given that anyone can lose money in this game, the management skills that come in hand especially those who are new in the market.
Before starting to trade one should ask himself or herself the amount they are willing to risk. It is worth noting that this is a matter of risk, this is basically saying that one should not risk an amount that you are not willing to loose. This safeguards you in case the market reacts in a way that you did not expect. Despite the fact that this business is all about taking risks, money management rules dictates that one should risk an amount which is reasonable according to their own terms.

There are lessons that one should learn while in this trade, the first one is trying by all means to prevent the risks in the Forex market through stop losses. The second tip is to avoid risking more than one percent of the initial capital. It requires high level of discipline to achieve this. The first management method helps in generation of several instances of psychological pain. The second management strategy provides several small instances of joy but at a risking of facing a few bad psychological hits. Having a wide stop strategy exposes the trader to chances of losing a week or even a month profits in just one or two trades.
The method which is chosen by any particular trader greatly depends on the individual personality; each trader has to discover what works best for them. Forex market accommodates the two styles equally well without the trader incurring any extra cost. Given that the Forex is largely based as a spread market, the cost of every transaction is similar in all cases regardless of trader’s position.
Money management involves setting the rules and following them strictly, if one of them is bent, the trader will not get the targeted amount of profits. The kind of rules that are set should rhyme well with the strategy that one chooses. This means that the trader should carefully consider the trading strategy and come use it to come up with the necessary rules. It is understandable that different strategies would require different money management rules.

Money management is important in any investment and more so trading forex, the kind of risk involved in this activity calls for extra caution but on the other hand one should be willing to take risks in order to succeed in this trade. It necessary to learn money management skills as they come in handy when trading Forex, this should be done before one starts trading.The learning process should continue ,with the trader looking to polishing the skills,Learning from those who are good at money management can offer good lesson,those that have worked and lead to their success.

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Avatrade Forex broker for PC Mac OS iOS Android /60-avatrade-forex-broker-pc-mac-os-ios-android/ /60-avatrade-forex-broker-pc-mac-os-ios-android/#comments Mon, 10 Mar 2014 23:41:30 +0000 /?p=60 In the classification of the Forex broker, we have found AvaTrade to be among the top positions. So, let’s give a look to this broker to better understand how does it work. AveTrade has been estabilished in Dublin in 2006 and today has offices in the most important trading cities, such as Tokio, New York, […]

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In the classification of the Forex broker, we have found AvaTrade to be among the top positions. So, let’s give a look to this broker to better understand how does it work. AveTrade has been estabilished in Dublin in 2006 and today has offices in the most important trading cities, such as Tokio, New York, Sydney, Dublin, Paris and Milan. Controlled by several banks and commissions (first of all the Central Bank of Ireland, the Australian Securities & Investments Commission in Autralia and the Financial Services Commission in Japan) it is available in several languages, among which the most common european ones and Chinese, Japanese, Arabic, and Taiwanese.

Avatrade review

This broker is characterised by several trading platforms, all very easy to use, where is it possible to trade in several fields, from Forex to Indices, from Equities to Commodities and so on. For those not very skilled in trading, the user-friendly interface is very useful to start understand how this world works: in fact several information on the markets, on the data analysis and so on are given in a way very easy to understand. AvaTrade platforms are Ava Trader, Meta Trader 4, Meta trader 4 Floating Spreads, Ava Option, Automated Trading, Mac Trading, Web Trading and Mobile Trading (OS, iOS, Android). It is very easy to realize that the last three are dedicated, respectively, to those that trade from Mac computers (but also from tablet in Java), to those that browse the web using Firefox, Safari, Explorer or Google Chrome and the last one, the Mobile Trading, to those who access the market from their mobile devices, using iPhone, iPad, Windows or Android.

How to start a trade with AvaTrade forex broker

AvaTrade is easy to use and does not require a great starting investment: in fact a deposit of one hundred USD (United States Dollar) is enough to open a trading position with this broker. As regards the leverage ratio, it is up to one to four hundred (1:400), that is a really suitable ratio both for novices and skilled traders. And for those that are beginners, the broker offer several tools for study and understand how the Forex trading works: webinars and video tutorial, but also updated news on the market and the Forex, market analysis, books and eBooks and so on.
And for those that want to learn without risk, or simply play to be a Forex trader, AvaTrade offers the possibility to open a demo account that is free and that allows to practice in a total ‘relaxed’ way, as it only works with virtual money. The real accounts, instead, are of different kinds. The first is the Avatrade Silver Account, created for the beginners or for those that want to deposit only a little sum. To open this account, in fact, the trader only need to deposit one hundred USD and then he can start his trading. For those more experienced, the Gold Account is proposed, that required a deposit of one thousand USD to be opened. The third possibility is the Platinum Account, dedicated to the Forex traders with great experience and that can offer a deposit greater than ten thousand USD. Those that are very expert and also interested in greater investments, can choose to open the Ava Select, an account that requires a deposit of one hundred thousand USD. The deposits can be payed by credit or debit card or by wire transfer. For not EU clients, several e-payment form are also allowed. As regads the withdrawals, they are payed back in the same way the deposit has been payed, and this take usually five business days. All the Forex trading are free and the broker does not charge commissions from any trading. In fact, like all the brokers, AvaTrade earns from the spread. Depending on the opened account, the spread can be fixed or floating and usually ranges from three to seven pips depending on the currency pairs.

Avatrade and binary options

Avatrade does not only offer the opportunity to trade in the Forex trading, but also in the binary option. This possibility is not visible on the site of the broker, as Avatrading has launched the binary option under the brand of PowerOption. So, on the PowerOption platform the binary options trading is available, in the high/low, in the sixty second and in the one-touch options.

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Gross Domestic Product – Forex economic indicator /49-gross-domestic-product-forex-economic-indicator/ /49-gross-domestic-product-forex-economic-indicator/#comments Sat, 08 Mar 2014 10:46:29 +0000 /?p=49 Gross Domestic Product Definition The release of economic data is important to a Forex trader, the timing as well as the data which is released greatly influences the choices that they make in the course of their trading. The Forex economic indicators usually create volatility, speculation as well as hope for those who are involved […]

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Gross Domestic Product Definition

The release of economic data is important to a Forex trader, the timing as well as the data which is released greatly influences the choices that they make in the course of their trading. The Forex economic indicators usually create volatility, speculation as well as hope for those who are involved in the trade. Gross Domestic Product (GDP) is one of the indicators that a Forex trader looks into in order to make sound decision. It simply means all the total market value of the goods and services which are produced within a given country in a certain period. For example in United States, the amount can be broken down into the following categories, that is, government expenditures, net exports, investment and consumption. When you talk of consumption, this is the amount of money that is spent at the household level; it includes such expenditures as in basic needs and other personal spending. The other category of GDP is the investment; this is the amount that is spent by business in buying things that help in the production of goods and services. These business expenditures include spending on the new equipment and plants. Also people at the house hold level may spend some money in acquiring property or other things which help them in production of goods and services. Gross Domestic Product also includes all the total government expenditure; these can be amounts which the government uses to pay its employees as well as in support of its programs and activities. The government is also involved in investment; this element must also be included when calculating the total wealth. The final element involves all the goods and services which are exported from a country, the figure which is obtained here should be less the total imports to a given country.
The figures which are obtained after considering all these elements can be compared with the previous year’s performance in order to establish the growth of the GDP.A rise in the figure will indicate a growth while a drop signifies a decline in a country economy.
GDP figures are usually released within certain period, this again depends on the country and the economic indicators calendar, there are some which give the report on a monthly basis while others do it every quarter. For example in United States the body which is charged with the role of releasing the report gives a quarterly GDP report.
Just like other Forex economic indicators, GDP has a lot of weight and impact on foreign exchange currency exchange. It serves as an indication that the economy is growing while at the same time showing an economy which is signalling contraction or withering down. Forex traders are interested in higher rates of growth; through this, the interest rates are likely to follow the same trend. When an economy is experiencing an upsurge, the benefits which are derived out of this situation trickle down to the consumers through increasing their spending and investment capacity. As a result of this, the prices may tend to rise forcing the central bank to intervene through taming where they increase the lending rates.
A GDP which shows a decrease, signify an unhealthy economy which is mostly followed by a fall in the currency rate, on the other hand a growth in GDP normally drives up the rates of the local currency.

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What is Forex trading /40-forex-trading/ /40-forex-trading/#comments Sat, 08 Mar 2014 10:39:54 +0000 /?p=40 To understand what a Forex trading is, we must for first explain what a Forex is. The term Forex derives from Foreign Exchange Market and is reffered to as Forex or FX or currency market. It is the market for the trading of the currency, and it involves all the buying and selling among the greater international […]

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To understand what a Forex trading is, we must for first explain what a Forex is. The term Forex derives from Foreign Exchange Market and is reffered to as Forex or FX or currency market. It is the market for the trading of the currency, and it involves all the buying and selling among the greater international banks. In particular, a great role in Forex is played by the National Central Banks that should have the role to control money supply or inflation.

So the Forex trading represent the trade of the different currencies. Of course, the trade is to be considered among different countries that have different currencies. Let’s see an example: in the great part of Europe, the currency is the Euro, while in England the currency is the Pound. So, if we buy the Euro and in the same time we sell the Pounds, or vice versa, we are are operating a Forex trading.

So simple?

Naturally, it is not so simple because, usually, you can not operate by yourself in the forex trading but you have to do it through a broker or throug a market maker. But what you can do is to select the two currencies you want to work on and when you want to do the trading.

Your order can be very fast, as the broker doesn’t need to go somewhere neither to meet any people or speak about the change of currency: everything is done in a couple of click on some terminal that pass your trade to the Interbank Market. So you can gain or loss money depending on the choice of the currency you trade in. In fact the currencies change their relative value during the days, teh week, the months and the year, so, for example, you can buy the pounds in march and sell them in june to obtain a gain. Let’s see how. Consider that in march you buy 2000 euro: you purchase them in pounds so you will spend about 1600 pounds. If you sell these euros when their value is greater, that means the exchange is advantageous, you can sell the same 2000 euro for the price of 1700 euro, that means that you have gain one hundred euro. But if you work vice versa and buy pounds, you have lost one hundred euro.

So if you trust the wrong booker, you can loose money in this ‘game’. The rise and fall of the prices are not casual, but depends on several economics, financial and politics factors, but also on natural events, such as earthquakes, or floods that a good brooker should understand, but that, as it is easy to imagine, sometimes are not predictable. And probably this is the reason for which the forex trading is considered exciting by a lot of people: the trade market is a risk.

We have said that there are no place where operate, neither person to meet: in fact the forex market has not offices neither a location, but operates on a network of banks and businesses that could grow or reduce everytime. This is one of the most peculiar feature of the forex, while the other one is that it operate twenty four hour a day. In fact, it involves the market of all the world that belong to different time zones: it opens on Monday morning, following the time zone of New Zeland (the first country that see the morning on monday) and it close on Friday following the time zone of New York (the last to see the friday evening).

The Forex trading is connected to a several related terms that are used in the forex language and that are fundamental to better understand the Forex itself. Let’s see some of them.

Forex Leverage Definition

The leverage is the increase return on the investiment. This means that when we operate on a Forex, we are working on a leveraged product. Strictly connected to the leverage is the meaning of the risk management. In fact, in the Foreign exchange, you deposit a little percentage of the total value you want to trade and aspect the increase of the return (or better, of the potential return) of this deposit. The leverage allows both the profit and the loss of the Forex to be higher respect to the traditional trading.

Forex Spread Definition

The spread represent the difference between the bid and the ask of two currencies we are working with. It is strictly connected to the Forex as the brokers use the spread to work and make money during the trade. The spread is not very different from the real or actual price: for example, if a price is 1000 and you buy for 1001 and sell for 999 you are always close to the real price, but you have a difference of two (that can be euros, or dollars, or puond or what else) that represent the spread. So, in both case, if you buy or if you sell you also have to consider the spread.There are some more parametres connected to the spread, for example the Pips, the Percentage in Points, that can change a little, not the meaning of the spread, but its way to work with it.

 Percentage in Points (Pips) Definition

The percentage in points is fundamental when you work with currencies that have difference in values on the fourth decimal place. So, this in not the case of two currencies that have great relative values, but of those that have a really small differences in values. For example if we have a currency that has a value of 1.44455 and another that have the value of 1.44555, we have a difference of ten pips. From the definition of the Pips, derive that if you have a trade with a positive Pips, you are making a profit, while, if it is negative, you are lose money.

 Lots, mini-lots and micro-lots: the unit measurement in Forex trading

There are some terms that are used in the Forex ‘dictionary’ that it is important to know to better understand the Forex topic. One of this is the ‘lot’, that is a term used to refer to an order of 100,000 units. So if we are dealing of one or two lots of a currencies, for example of pounds, we are dealing with one hundred thousand or two hundred thousands pounds. But as in this market we work with pairs of currencies, we can sell a lot of pound and, of course, we are not purchase a lot of euro, as the exchange from pound to euro is not one to one.

So sometimes can be useful to use ‘portions’ of lots. How to obtain them? We must introduce the mini lots and the micro lots, that are used in the same way we use centimetres and millimetres as portions of the metres. A mini lot of a currency correspond to ten thousand of that currency, while a micro lot correspond to one thousand. So, we can trade in mini lots or in micro lots if our trade is not so rich, and we do not arrive to move a lot.

 Pips again

Now we have to go back for a moment to the Pips. Because as the Pips is the percentage in points of the currency we are using, calculated on the fourth decimal place, if we speak in terms of lots, we must realize that the Pips of a lot is different form the Pips of a mini or a micro lot. For example, in the standard lot of the United Sate Dollars (USD), one pip will be ten dollars, while for a mini lot of dollars, one pip will correspond to one USD. The relationship between lots, mini lots, micro lots and Pips for the different currencies is not linear and easy, so that to have an idea of the values is it possible to consult the available on line calculator.

Stop loss Definition

As the name itself suggests, the stop loss is something that stop the losses. To be more precise and using more appropriate words, the stop loss is an order that allow you (or better your broker) to close all your trades in order to stop, or at least limit, the losses. In the moment the order is sent, that means in the same time the broker click on the stop loss option, the trade is closed considering the current market value and it is not possible to chang that value. So, when the market is or seems to be against your trade, you can decide to stop loss to save your remaining financial. Of course, this order is a kind of preserver from a complete collapse, but ask for it is more a strategy than an obbligation. Of course, if you realize that the market is going far from your trade line and in the opposite direction, the stop loss is obliged. Nevertheless, some people can decide to risk, and if the market turns in the right moment, obtain to be save from the loss or, in extreme case, from the failure. Because the real point is that the market is very unpredictable, and even if the trend seems to go to a precise direction, an unexpected event can change completely the way.

 Take profit and limit order Definition

The risks of the Forex trading can be kept under control not only using the stop loss order, but also using the Take profit order. This order closes the trade you decide, when you reach in it a desired level of profit. Just like the stop loss order, also the Take profit one allows you to close the trade at the current value that the currency you work with has in that precise moment. It is used when you want to ensure a certan profit, so that, when you reach it, you can feel satisfy with it and decide not to risk tha market turn in the other direction and you lost that profit you have gained. Of course, it preserves you from little losses, but also from the possibility to gain more: in fact, if you close the trade and the market goes on in the right direction, you have no possibilities to gain no more from this. So, in the same way of the Stop loss, the decision to close the trade with a Take profit order is especially a strategy: in Forex nothing is for certain.

Sometimes, the Take profit is also defined as Limit order. Really, they can correspond in some case, but they are not the same things. In fact the Limit order gives you the possibility to close the trade not when you want, because you see that can be convenient in that moment, but when you reach a precise value you have asked for. So this precise value is the limit you can not go beyond, both in right or in the wrong direction, and when it is reached, the trade is closed.

 Long and short in Forex Trading

In Forex terms usually used are Long and Short poitions. Let’s see what they refers to. A Long position is given when you buy a currency pair and want (or hope) to sell in a second time to a higher price. In traders dictionary, this is a Long position, also called ‘going long’. On the opposite, going short or be in a Short position, refers to the situation in which the currency pair you have bought falls in the value, so that you are not going to obtain a higher price in selling them, but a lower one.

So usually, when a person buy a currency pair, he do this to obtain a Long position. If he sells, this is because he is going short.

Bid and ask in the Forex

Another couple of terms associated and opposite in the meaning are Bid and Ask. All the quotes in a forex trading have two prices, one connected with the Bid and the other to the Ask. The normal is that the Bid is lower than the Ask, that means that the price of the Bid is lower than the price of the Ask. In particular, the Bid is the maximum price that you (as buyer) want to pay for a currency pair or for a security. On the contrary, the Aask is the minimum price that you, this time as seller, whant to receive, again for a currency pair or for a securety. As the two parametres are not the same, to have an agree in transaction a price is needed that, usually, is in the middle of the two.

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Retail Sales – Forex economic indicator /37-retail-sales-forex-economic-indicator/ /37-retail-sales-forex-economic-indicator/#comments Sat, 08 Mar 2014 10:31:57 +0000 /?p=37 Retail Sales Definition A Forex trader is interested in different economic indicators; they help in the decision making process leading to sound investment. The information obtained through use of these indicators help in knowing when to step up, hold or even exit from a market. Retail sales report is one of the important Forex economic […]

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Retail Sales Definition

A Forex trader is interested in different economic indicators; they help in the decision making process leading to sound investment. The information obtained through use of these indicators help in knowing when to step up, hold or even exit from a market. Retail sales report is one of the important Forex economic indicators that one considers or consults when making the required decisions. It mainly gives the Forex trader a rough idea on the level at which the consumer is spending. Consumer spending is one of the key drivers of an economy, when it is low, there is a clear indication that the income levels have gone down or the majority of the people in the country have resorted to savings. On the other hand a higher consumer spending indicates, high income, higher inflation or in some situation a low saving culture.
Analyst look at the retail sales report as in important indicator which gives the general idea on the strength of the econmy.Economists and traders rely on it in determining the overall purchasing trends. The report tracks the value of goods that are sold in the retail industry through taking a sample of companies or businesses which are engaged in this kind of sale. The sampling includes the point of sale and non store retails and companies both small and big.

The retail sales report is released periodically, in most cases it is usually on a monthly basis. The report released data for the previous month sales, something that makes it a timely indicator for gauging the performance of the industry as well as the price level activity.
The retail sales usually has two components; one is the total sales which were made in a given month accompanied by the percentage change from the preceding month. The second component is ex autos since the ticket price and seasonality can be skewed to the total figure.

How the retail sales data affect the foreign currency exchange market
The report usually gives two indications, the consumption level in a given country as well as the level of spending; these are two components which clearly tell whether the economy is expanding or not. For example when the retail sales figures show results which are better than expected, this is an indication that the economy of a country is actually expanding. Such kind of data would favor a national currency since a stronger economy purchasing more have the capacity of sparkling inflation. Such a development would lead to central bank raising the interest rates to avoid or control the inflationary pressures, a measure which would in turn lead to the appreciation of the currency. On the other hand a retail sales report which less than what was expected would mean that the economy is contracting, as a reactionary measure, the central bank would lower the interest rates with an aim of stimulating the economy. The weak retail sales data actually puts pressure on the value of the currency.

In summary, retail sales is one of the big Forex economic indicators, it can give a clear status on how the economy is performing at any given moment. It is a timely data which is released on a monthly basis allowing the Forex traders to get the current information which may affect the value of a currency.

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Employment Change – Forex economic indicator /34-employment-change-forex-economic-indicator/ /34-employment-change-forex-economic-indicator/#comments Sat, 08 Mar 2014 10:30:12 +0000 /?p=34 Employment Change Definition Economic indicators are bits and pieces of economics and financials reports which are published by different agencies of private sector as well as the government. These statistics are usually made public on a regular basis; this can either be monthly, quarterly, and yearly while some, though rare, may be issued to cover […]

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Employment Change Definition

Economic indicators are bits and pieces of economics and financials reports which are published by different agencies of private sector as well as the government. These statistics are usually made public on a regular basis; this can either be monthly, quarterly, and yearly while some, though rare, may be issued to cover a longer period. The data is supposed to help the market analyst and observers monitor the performance of a country economy. Almost everyone in the financial market religiously follows their release in order to make a sound investment decision or offer accurate information in relation to the future performance of the financial markets. Given that that are so many people who react to the information which is presented by these indicators, they have the potential of shaking the market through generating revenue as well as moving prices. Given the nature of these indicators, in some situation one might need an advanced degree to interpret and analyze data as well as use it to make decisions. This does not mean that a layman cannot make sense of what the data says; with simple guidelines it is possible to understand the information and make sound decisions.
Knowing what each economic indicator means to economic performance and Forex market in general is the first step towards making sense of the data. It is also important to know when each of it is due for release; an economic indicator calendar can help greatly towards this end. With various economic indicators being released regularly this tool will tell the investor which report is due when. Employment change is one of the economic indicators that a Forex needs to understand, it shakes every sector of the economy. Employment reflects the economic situation in a country, a rise in the number of employed people means that the things are doing well. It means that industry and economy is doing well, people are getting hired, they are getting some income to sustain them. This means that the economy will grow and future prospects of the country performing well are high. This will be through increased investment by locals as well as foreigners; the investors have faith that their money will yield high profits. To invest in this economy, those who are from outside the country will have to buy the national currency .Demand for the local currency will eventually lead to rise in value. On the other hand employment change which indicates a drop in the employment rate spells doom the economy as well as the local currency. A drop in the employment rate means that a given number of people will be without salaries or wages. They will have to rely on welfare meaning that the government will be forced to spend more to sustain them. It also means that the spending power of this group will be greatly diminished. This will have a multiplier effect, the economy will not perform well, there will be few people who will be interested in putting there money here. This reduces demand for the local currency ultimately reducing its market value.
Experts say that value of currency and employment change are edges of a sword for industrial economies as well as those countries which rely on tourism. An economy whose currency is expensive will not do well as other countries will not afford buying goods and services using this currency. As a Forex trader it is important to understand this information in order make sound investment decision.

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Unemployment rate – Forex economic indicator /30-unemployment-rate-forex-economic-indicator/ /30-unemployment-rate-forex-economic-indicator/#comments Sat, 08 Mar 2014 10:22:53 +0000 /?p=30 Unemployment rate Definition There are different economic indicators that affect the currency of a country and in essence its economy. Unemployment rate is one of the indicators that can either lead to an increase or decrease in the value of a currency. This means that the release of economic indicators by the body which is […]

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Unemployment rate Definition

There are different economic indicators that affect the currency of a country and in essence its economy. Unemployment rate is one of the indicators that can either lead to an increase or decrease in the value of a currency. This means that the release of economic indicators by the body which is charged with the role of managing a country statistics have an important bearing on the currency trade. Different economies usually release employment report regularly, for example in United States of America, this is usually done on the first Friday of the month at 8:30 Am Eastern Time. In this report which the Federal Bureau of Labor Statistics calls Employment Situation Report, clearly stipulates the rate of unemployment in the previous month, the changes that have taken places as well as other host of labor statistics. This economic indicator is usually generated from the surveys which are taken in different regions of the country.
Why unemployment rate matters in an economy
Majority of the citizens in a country usually source their personal income from employment, therefore it has a major influence on how people spend as well as the general economic growth. This means that unemployment rate which in economic terms is considered a lagging indicator can give considerable information on the performance of an economy. It can be also a good source of information as far as the health of a given sector of an economy is concerned. For example when a country has a high rate of unemployment, the general indication that can be derived here is that the economy is not performing well or its Gross Domestic Product is falling. This gives a clear indication on how the national currency will perform in relation to the other currencies. On the other hand when the economic indicators show that the level of unemployment is falling, signs of an economic expanding or picking up are clear, this will normally have a positive effect on the country’s currency.
In an economy, the unemployment rate basically gives the percentage of the labor force which is not working or is seeking employment. Although there are different definitions of unemployment, the economist usually considers the number of people who are willing to work but have not secured employment in a given time. While computing the unemployment rate, statisticians do not consider those who are not of age as well as those who have the capacity to work but have voluntary opted to be out of employment for various reasons.
When an economic report comes out and the low unemployment levels are reported, the impression created to the investors is that the economy of a given nation is performing well. Such kind of an economy is worth investing, this eventually leads to a rise in the value of the currency .making it a good bargain for the Forex trader. On the other hand when the report gives a high unemployment level the investors will perceive the economy as weak leading to exodus of investment to economies which are performing better. This will eventually lead to depreciation of the currency.
With the Forex economic indicator such as unemployment rate, traders are in a better position to make sound decision as far as buying and selling of the currency is concerned. They will know when to hold on to currency stock and when to exit the market to avoid heavy losses.
An economic indicator calendar can be an effective tool in helping the trader to anticipate the release of the information and be ready for the change that will be brought through the release of a given indicator

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Consumer Confidence – Forex economic indicator /27-consumer-confidence-forex-economic-indicator/ /27-consumer-confidence-forex-economic-indicator/#comments Sat, 08 Mar 2014 10:20:54 +0000 /?p=27 Consumer Confidence Definition Investors need information that will guide them in making economic decision. This information is usually available at any particular time of the year, therefore any trader who is looking forward to make important economic decision should rely on it to be in a position to make viable conclusions. One of the most […]

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Consumer Confidence Definition

Investors need information that will guide them in making economic decision. This information is usually available at any particular time of the year, therefore any trader who is looking forward to make important economic decision should rely on it to be in a position to make viable conclusions. One of the most important parameter is economic indicator. Economic indicators are markers which provide proper guidance to the investors on the underlying data. The information is crucial for any economic decision that the traders make. The indicators usually describe how the country economy is performing and the impact this has on the national currency.
Public policy dictates that the stakeholders should be kept informed on the changes that are taking place in their country or entity. If it is private sector, the shareholders, employees and other interested parties should be periodically provided with financial information which clearly shows where the company stands as far as its performance is concerned. The same case applies to the government; it has a role to inform its citizens on the performance of the economy. This entails the release of economic data on a regular basis. Governments usually adhere to given schedules, for example some economies give quarterly reports where the economic indicators are released for public consumption. Traders in Forex market need to keep watch of these indicators to be in a position to make sound decisions.
In and around time when the Forex economic indicators are released, the trading volume either decreases or increases. The change of trading volume in a Forex market is usually determined by the type of economic indicators which are released. If the indicators point out to a bright future traders will react positively through increasing their activities around a currency ,on the other hand if the released indicators paint a gloom picture as far as the current and future status of the economy is concerned, there will be panic in and around the market. People will rush to move away from the currency which are not performing well or withdraw from the market in anticipation of the worst performance in the future.
Traders may not be in a position to interpret some of the indicators especially if they do not have sound background around this area. There will be a need to consult an expert to give a clear picture on what they mean. This will greatly help them in making sound decision especially matters pertaining to buying or selling of a currency.
To use the data, one must know exactly when it is scheduled for release; this helps the trader to make a decision based on the information. An economic calendar is one of the tools which can help the trader to know when a given economic indicator is due for release. Having this kind of information before hand puts one at a competitive advantage since the trader will be in a position to tell how a currency will behave in relation to the released data. If for example you know that the employment data will be released on Friday and have been following the market, release of a promising report will move the market, as the traders start unwinding the short positions.
As a trader one should try to understand the basics, grasping the relationship between the report and economic performance and in general the currency movement in the market will help in making worthwhile economic decision.

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Consumer Price Index – Forex economic indicator /24-consumer-price-index-forex-economic-indicator/ /24-consumer-price-index-forex-economic-indicator/#comments Sat, 08 Mar 2014 10:17:32 +0000 /?p=24 Consumer Price Index Definition CPI is the acrostic for Consumer Price Index. The CPI is very useful because it is a sort of guide to inflation in the USA. In order to check the variations, it examined a “basket of goods” containing some products, the most important in the normal life of a person living in the […]

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Consumer Price Index Definition

CPI is the acrostic for Consumer Price Index. The CPI is very useful because it is a sort of guide to inflation in the USA. In order to check the variations, it examined a “basket of goods” containing some products, the most important in the normal life of a person living in the US, using them to check the differences in price from a year to another. These products could be milk, bread, eggs, water and so on.
There are three important figures involved in the CPI: the first is the CPI for Urban Wage Earners, the second is represented by Clerical Workers (CPI-W) and the last all Urban Consumers (CPI-U). This last varies a lot depending on seasons because some products are not found in winter for example but you can eat them in summer. This is true above all for fruits and vegetables. Apart the Core CPI that is represented by consumers, there is the Chain-Weighted CPI too. This is particularly important because it is based on the choices of consumers. All this is extremely interesting because if a person buy a product as a substitute of a cheaper one, this is measured by the CPI. Of course, this research, registers also the geographic area where products are sold and bought so it is possible to do different lists for every place.
Of course this is extremely important for investors who direct their own business considering all these data also because they are always changing. Only after analysing these data, investors can do their choices.
The CPI is the basis of economy in the United States because all sectors are influenced by it. Insurances, medical cares, cost of livinf and every sort of services, are based on the results of the CPI. This is the reason many investors can say that it is the reason of their business and they are related to it for every idea they can have in mind. The rate of inflation is a sort of judge for investors.
All data are published and deeply analyzed by media. It is important to do researches about them and investigate the weak points.
These researches are conducted by some agencies run by the Government itself that is particularly interested in the different markets and their health.
The data are also published. Immediately after, many consumers are interested in seeing the results. They can create their own account with a pin they use to log on. Clicking on Economic Calendars, it is possible to discover the price action for many products. This data are key points for the economy and they decide if it can grow or not. Moreover, they are absolutely vital to move markets even though not all products can help this process to go on. Employment is also directed by these results and inflation depends entirely on them. Notwithstanding the expectations, sometimes there are some results that cannot be expected. The power and the strenght of currency is based on Forex economic indicator too and equally important to give the economy a particular trend to predict how business can go. This is the so called leading indicators factor. The lagging indicators, instead, are considered after economy has already started its new trend. From these indicators, it is possible to check the changes the market has registered.
It is easy to understand that all this is extremely interesting both for consumers and investors who can have a preview of the ongoing cost of living and the future of business. This is the main reason the CPI is so important for the economy in the US and in the other continents.

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