Fundamentals trading Economic indicators

Fundamental trading refers to a trading style that is dependent on the knowledge of upcoming economic events and preparing accordingly to take advantage of the momentary swing movements in the market. It is a style of trading that can generate a huge number of pips in a relatively short space of time or can blow your account in a matter of minutes if you do not risk appropriately. Here we will break down what fundamental trading is and the economic indicators to look out for to take advantage of these swings

To correctly predict market movements using Fundamental trading you need to first understand how economic news affects the market. Here we will take a look at a few economic events, state what their impact to the market is and find ways to position yourself to take advantage of these moves.

Because fundamental trading takes advantage of momentary swings in pips it is always advisable to find a trading broker with small fixed spreads. To do so I recommend using WikiFx. This app helps you find the best verified and regulated brokers world wide. They allow you to compare brokers in your own country and find the brokers who will give you the best service. They also show you fraudulent brokers so you stay far away from them. So if you in the market for a broker, try WikiFx.

Gross domestic Product (GDP)announcement

The GDP of a country shows the strength of a country economy. It shows the market value of all the services and products a country provides. This announcement is usually prelude by the advanced report and the preliminary report. These two reports give an indication of what the GDP reading will turn out to be. If the GDP of a country is considered strong you buy the country's currency if it is weak you sell the currency. Eg if you trading EurUsd and the GPD of the USA is strong you will sell the pair because the USD is going to be considered to be strong when compared to the Euro. If the USA GPD is weak you then buy the currency pair and the USD will be weaker the the EURO. The vice versa applies if the GDP of EUROPE is strong or weak.

Consumer price index CPI

This indicator shows the different ways which the price of items has changed in a country. By comparing the readings one is able to see if a country is either gaining or losing money from its sales and purchases of its own products. These figure should be also compared to export and import readings to see if these prices are changing cause of economic progress or price changes to exported and imported goods

Retail Sales

This indicator summaries all of the receipts received by all retail stores of a country. This allows us to gain an understanding of consumer spending patterns within a country. Good readings usually indicate a healthy economy with great money flow, bad readings may indicate an economic slowdown or downturn and so this indicator can aid us to assess the immediate economic direction of a country

Other indicators to keep an eye on are the producer price index (PPI), employment cost index (ECI), purchasing managers index (PMI), durable goods report and housing starts. These reports and the other mentioned above are highlighted on an economic calendar. When looking to trade these events be sure to set up a timer or alarm of some sort which will indicate when these events will take place as well as the readings of those events when they are released.