Economic indicators

Economic indicators are those signals that are all around that will show you which direction the market is currently heading. It is vital to your success as a Forex trader that you keep one ear on the ground to know what is happening in a wide range of economic areas so as to stay aware of what is happening, locally and internationally. This will enable you to make the best decisions possible regarding the investments you have already made and helping you know which ones you should be making. Some of the indicators to watch out for are:

• Retail Sales: By way of definition, retail sales, as indicated by their name, is simply a projected estimate of what sales will be by retail shops in the US. These are usually released monthly in advance and are usually not adjust for inflation. In order for this report to be generated, a sampling of receipts from participating retailers is compiled. The importance of this in relation to Forex trading is that it is a valuable indicator of which industries and more specifically, which companies are worth investing your money into.
• Existing Home Sales: Existing homes are homes that have been standing for a while, while the rest are newly constructed. The rate at which homes are being sold can provide you, the trader, with important clues into the economic situation. For example, some sellers might sell one home to make a profit and use that profit to buy new furniture for their new homes. That could be an indication that the furniture industry will be booming very soon. Interest rates are also influential to the Forex trading industry and also affect existing home sales. These are all things to look out for when you get into Forex trading.
• Leading Indicators: Traders use these types of indicators to forecast upcoming changes in the market. Because leading indicators might change before the market actually changes, these are important principles to pay attention to in order to invest wisely. It is important to realize and understand that leading indicators are only indicators and cannot precisely foretell where the market is heading: they are only predictors.
• Trade Balance: Trade balance compares a country’s economical imports to its exports. If the country is experiencing a trade surplus, then the exports going out are more than the imports coming in. Opposite of this is when a country is experiencing trade deficit – the trade balance is in the negative with more goods being imported the exported. This aspect is foundational to successful Forex trading because the trade balance relies on the exchange rates between two particular countries. Trade balance will also be a source of important information regarding the exchange of those two countries’ currencies.

While these are just a few of the economic indicators that you, the Forex trader, should be aware of, it is important to recognize that there are many, many more indicators to watch out for. Forex Justice can help you in knowing what is happening economically around the world. It’s just that simple to sign up and have the very best help and expertise available!