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How to use National Economic Indicators in forex trading ?

May 24, 2019 by Investor

In this article, I am going to explain about national economic indicators. These are the tools used to measure the performance of a country’s economy. There are several ways to use the economic indicators for a country. The economic indicators are used to predict the future performance of an economy and with that the current performance can also be measured. The economic measurement data is released occasionally, and it is used to measure different sectors of economy like agriculture, labour, manufacturing, and real state.
Types of national economic indicators
Mainly, there are three basic types of economic indicators that are used to measure the performance of an economy. This includes:
1. Leading indicators: This type of indicator is used to predict the future economic events of a country. This includes balance of trade, which suggests that if a country has positive balance of trade, it shows that more money is reaching the economy of a country. This helps in raising jobs and maintaining the stability of the economy.
2. Lagging indicators: These are the indicators that come in to action whenever there is a change in the economy. Employment report is an example related to this indicator.
3. There are some events like gross domestic product that comes under coincidental indictors. These are also helpful in predicting the economic events.

Timeline of national economic indicators
Economic news calendar is a tool which displays the timely data of national economic events. All the schedule data release is done in a proper timely manner. However, some of the data is updated monthly like employment reports. On the other hand, GDP is updated quarterly. This data is usually available on almost all trading platforms.
Impact of economic indicators in the national economic planning
As these indicators tell the exact figure of what an economy is doing, so a government can use them to decide what are the areas that they need to look at. For example, if an economic indicator is showing poor numbers in the employment sector, it shows that there is a lack of jobs. Government needs to try its best to bring things back to the normal position. On the other hand, if inflation is the reason behind this issue then government may try raising the interest rates.
Impact of economic indicators in the national financial trading
The demand and supply factors are usually responsible for the price movement of a product. Demand is a force attracted towards a product/asset of the market. When this force is on the positive side, it leads to the increment in the price of the asset.
The market force data is released in the timely manner that displays in which condition and at which time price movements will occur. We have seen that national economic indicators related to pricing are highly influential in the prices of stocks, commodities, currencies, and credit ratings. Traders can then use these numbers to predict the future position of an asset.

Related posts:

  1. Economic Indicator – What is an Economic Indicator?
  2. How to use Consumer market reports in online forex trading ?
  3. What is Gross national product?
  4. How to use Gross Domestic Product GDP in forex trading analysis ?
  5. How to use Economic Indicators in Forex News to Make Good Forex trading Decisions
  6. The Forex Market and Economic Indicators
  7. Gross National Product – What is Gross National Product GNP economic performance ?
  8. Economic Indicators

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