6 Leading Economic Indicators to Trade the News| KOL Analysis•Bola Akinya

The Forex market, established in 1971, was created when floating exchange rates began to materialize.

The Forex market is not centralized, like in currency futures or stock markets.

Trading occurs over computers and telephones at thousands of locations worldwide.

In my personal experience, I found this index of Six economic indicators that typically lead overall economic activity. Especially if you want to trade the news, and trade it effectively, armed with your strategies.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform.

By tracking and following economic data like the index of leading indicators, investors will know what the economic backdrop is for the various markets.

The index of Leading Indicators is designed to predict turning points in the economy such as recessions and recoveries. Boom and Bust.

Purchasing Managers Index (PMI) - The National Association of Purchasing Managers (NAPM), now called the Institute for Supply Management, releases a monthly composite index of national manufacturing conditions, constructed from data on new orders, production, supplier delivery times, backlogs, inventories, prices, employment, export orders, and import orders.

Producer Price Index (PPI)– PPI is a measure of the average price level for a fixed basket of capital and consumer goods paid by producers.

The PPI measures price changes in the manufacturing sector. It measures average changes in selling prices received by domestic producers in the manufacturing, mining, agriculture, and electric utility industries for their output.

Inflation at this producer level often gets passed through to the consumer price index (CPI).

The relationship between inflation and interest rates is the key to understanding how data like the PPI influence the markets and your investments.

Retail Sales – Retail sales measure the total receipts at stores that sell durable and nondurable goods.

Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers.

These trends from the retail sales date can help you spot specific investment opportunities, without having to wait for a companys quarterly or annual report.

Trade Balance - The balance of trade is a statement of a countrys trade in goods and services.

It covers trade in products such as manufactured goods, raw materials and agricultural goods, as well as travel and transportation.

The balance of trade is the difference between the value of the goods and services that a country exports and the value of the goods and services that it imports.

If a countrys exports exceed its imports, it has a trade surplus and the trade balance is said to be positive.

If imports exceed exports, the country has a trade deficit and its trade balance is said to be negative. The balance of trade sometimes refers to trade in goods only.

Unemployment rate - Percentage of employable people actively seeking work, out of the total number of employable people determined in a monthly survey by the Bureau of Labour Statistics. An unemployment rate of about 4% - 6% is considered “healthy”.

Lower rates are seen as inflationary due to the upward pressure on salaries; higher rates threaten a decrease in consumer spending.

Nonfarm Payroll – The employment situation is a set of labour market indicators.

The unemployment rate measures the number of unemployed as a percentage of the labour force.

Nonfarm payroll employment counts the number of paid employees working part-time and full-time in the nations business and government establishments.

Now it is one thing to know how to interpret the Economic calendar, it is another to trade the news itself.

A lot of factors has to be put in consideration to use the data, like your timing, exit and entry strategies and knowledge of the Economic cycle. Sometimes, impact from the news makes for guaranteed price action and sometimes, not.

Other factors like interest rates, political instability, inflation as well as large market orders can call for sound impact on the share prices.

Biography

Bola Akinya is a Forex trader and consultant with more than 20 years of immense experience in Forex Indices, Commodities and Currencies.

Prior to becoming a professional Trader, she held positions as a Head of Sales/Business Developer with Credit Registry and Operations Manager with Peak Merchant Bank both in Nigeria before moving to UK where she worked with great companies like AIG and The Wealth Training Company as Course Instructor and Speaker for over 15 years on the FX and Stock Markets before she started her own company – The Learn and Earn Forex Training Company over 5 years ago.

Over the years, she learned 121 from Top traders all over the UK which enabled her to develop her own unique strategies and trading systems that has made her a successful trader and Trainer.

She is married with 2 boys and 2 cats.

With the combined use of Fundamental and Technical analysis, she trades on the short term – medium term, as well as Economic News releases, combining both to give the consistency that is required for successful trades.

[About The Author]

Bola Akinya is a Forex trader and consultant with more than 20 years of immense experience in Forex Indices, Commodities and Currencies.

Prior to becoming a professional Trader, she held positions as a Head of Sales/Business Developer with Credit Registry and Operations Manager with Peak Merchant Bank both in Nigeria before moving to UK where she worked with great companies like AIG and The Wealth Training Company as Course Instructor and Speaker for over 15 years on the FX and Stock Markets before she set up her own Forex training school – The Learn and Earn Forex Training Company 5 years ago.

Company as Course Instructor and Speaker for over 15 years on the FX and Stock Markets before she started (my own) company

Through using of Fundamental and Technical analysis, with highlight of trader psychology, she has derived successful trading strategy in short and medium term.

As the top Forex coach and mentor, she has trained individual traders/investors with her formidable strategies.

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