Trading with Traders – Level 4 discusses and describes the types of fundamental analysis news and statistics which are utilised and studied by Forex traders the world over. The book concentrates on the key indicators that affect the foreign exchange markets.
Two types of analysis are used for the forecasting of price movements: fundamental and technical (see Trading with Traders – Level 3). The fundamental analysis method focuses on the theoretical models of exchange rate determination and on the major economic factors and their likelihood of affecting the foreign exchange rates.
Fundamental analysis is made up of economic, financial, and political factors. Economic factors as opposed to the other two factors have scheduled release dates. The dates and times of economic data release among the industrialized nations are known well in advance. Traders carefully watch for certain economic data as it can trigger or be an indication of some future positive or negative economic factor. Economic data is generally released on a monthly basis.
The schedule of when and which economic indicators are going to be published is printed in all leading financial newspapers (Financial Times/Wall Street Journal) and magazines (Business week), or traders use the monitor sources, Reuters, or Bloomberg, to collect information from news publications and from the news wires own up-to-date information.
Although there are many indicators which are released not all of them affect the Forex markets. However, the indicators which trigger key trading signals and which are detailed in this book are: Industrial production which is an important economic indicator because it reflects the strength of the economy and the strength of a currency, so traders use this indicator as a trading signal. Capacity utilization can indicate that output levels are reaching full capacity and the economy is overheating and inflation could be on the rise. Traders would regard such indications as a trading signal. Durable goods orders are a good indicator of consumer confidence and show a consumers tendency to spend. This is generally a bullish trading signal for the domestic currency. Inflation is an important number for traders and they follow the indicators that reflect inflationary trends very closely. The indicators traders watch are: Producer Price Index, Consumer Price Index, GNP deflator, GDP deflator and the Employment Cost Index. All of these and more are covered in this book.
About the Author
Philip was born and educated in the United Kingdom. He joined Citibank in London before moving to Athens where he worked as a foreign exchange trader for both Citibank and Chase Manhattan. Philip was then posted to Citibank's Middle East North African Training Centre in Athens/Beirut as the operations manager and a foreign exchange trainer. After returning to the United Kingdom Philip joined Union Bank of Switzerland as the Head of Learning and Development and introduced trading simulations as a safe way for new traders to trade. In 1993 he was appointed Head of Learning and Education for UBS in North America. He later left the bank and went into partnership with two colleagues and set up a successful financial training company (New Learning Developments) in New York City. At New Learning Developments he developed relationships with all the major investment banks such as Goldman, Lehman, JP Morgan, and other major financial institutions such as The Federal Reserve Bank, Chase, Citibank, ABN-AMRO and the World Bank. In 2001 he returned to London where he worked as a training consultant to financial services institutions and the Ministry of Defence. He now spends his time developing knowledge databases for on-line brokerage houses and conducts webinars on foreign exchange and on-line retail trading.
- File Size: 1648 KB
- Print Length: 59 pages
- Publication Date: August 25, 2012
- Sold by: Amazon Digital Services LLC
- Language: English
- ASIN: B0092E1A22
- Text-to-Speech: Enabled
- X-Ray: Not Enabled
- Word Wise: Enabled
- Lending: Enabled
- Screen Reader: Supported
- Enhanced Typesetting: Enabled