Welcome! Dear Traders,you are reading my forex trading experiences. Forex trading is a very profitable and very risky business opportunity. If you are a beginner, calm down,have a cup of coffee, and convince yourself that you need to study hard to win in forex trading. Obviously, the task is not easy as the statistics claim that only 5% traders win in forex trading. If you are determined, serious,and hard working, you can surely be included in the group of winners.

FOREX FUNDAMENTAL ANALYSIS:KEEP THE RECORDS OF ALL ECONOMIC EVENTS

As beginners in forex trading, almost all traders know the immediate effects of economic events on a currency pair, they also emphasize on the release of an economic data, but very few traders measure the overall long term effects of economic events on a currency pair. I know so many forex traders who wake up early in the morning, and sit in front of the trading platform before they brush their teeth and have a wash, and they wait for the economic data release.

I also know some other traders who scare to trade during an important economic event that provides higher volatility. To trade during an important economic data or news release, the traders have to be brave enough, and the source of the bravery is the confidence, which is achieved from the expertise. 

I am writing this post to share the way I keep the records of all economic events to be confident in trading forex. I keep the records of all monthly economic events of a certain currency on a single page in tabular form. The table has four columns first one is  the economic events, second one is importance of the events, third one is actual data released, fourth one is data foretasted, and the final one is previous data. 

For every currency, I have a single page to record the all economic events in a month. I only keep the records of the economic events that have medium and high level of importance. The question is "How do this records can help to make a trader confident in trading?"

At the beginning of a month, traders cannot predict the economic data or cannot understand the sentiment of the market. With the increase of the number of data in the records, they will have idea about the fundamental strength of a currency. I generally write the summary of economic reports at the opposite page.

When I have PPI, retail sales and durable good orders data on my table, I can predict the upcoming CPI. This way I predict an upcoming economic data, analyzing the data already released. All traders should keep it in their mind that the data already released create the market sentiment towards the upcoming data.

If in a market hour traders see the healthy economic data on their table, and predict that the upcoming data will be better than forecast, the traders will show bullish sentiment towards that currency. The summary of economic report helps the traders to understand the future monetary policy. Mentionable the authority to monetary policy keep eyes on the economic indicators to design the monetary policy.

That is how traders can take the records of economic events and use them to trade forex confidently. A records of economic events can help the traders to track the monetary policy, to read current economic health,to predict up coming data, and to read the market sentiment. The successful application of this records greatly depends on the knowledge of correlation between the economic data and what the economic data explain about the economy.

If you have any questions, suggestions or complements, please drop a comment below.

2 comments :

  1. Hello Albab,
    Very interesting blog, may you please help me out by telling me the key economic events for major currencies (GBP, USD, EUR, JPY ..). So i can start tracking the results myself.
    May you also give an example of how you can predict certain event from previous events.
    imadelkhouri@gmail.com

    Thank you!

    ReplyDelete
    Replies
    1. Hi Dear,
      The major economic events for a currency is the interest rate, CPI, retail sales, unemployment rate etc. I will suggest you to see the economic calendar by investing.com, where you will find the most important economic events for almost all currencies.

      To predict any economic event, firstly you need to know the relationship among the economic events, e.g. if an economy has higher CPI in a given month, you can predict a higher retail sales for that month.

      My next post will answer your question...

      Thank you

      Delete

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