Economic Indicators

Of all the fundamental indicators being used in the forex market, the economic indicators are the ones that provide the most information for forex traders. The thing about economic factors is that they occur in a steady stream, at specific times and more often than any other factors throughout the market.

It is vital for a trader to be aware of economic announcements so that they can make the most informed decisions possible on entering, exiting or adjusting a position. The best traders from around the globe usually keep a continual eye on all economic announcements. However, the hardest part is learning how to forecast the proper trend after the announcement is made.

The economy is something that all forex traders need to keep a close eye on while they trade because a lot of how the market reacts is based off of economic announcements made throughout the world. Below we have listed and explained a few of the economic indicators that you will want to follow as you further your online forex trading.

GNP and GDP

The Gross National Product is considered to be the most significant economic indicators and the majority of forex analysts agree that it does a good job of measuring economic performance as a whole. The GNP is the sum of all the goods and services produced by the United States residents both in the US and abroad.

Many people get the Gross Domestic Product confused with the GNP but the GDP is the sum of all goods and services produced in the US by both domestic and foreign companies. When comparing these two side by side, the Gross Domestic Product is usually more popular outside of the United States.

Consumer Spending

The consumer spending actually looks to measure the consumer confidence, which makes it a little more psychological in nature. Many people think that it measure the actual spending but this is a common misconception. This is looked at through personal income and discretionary income, so consumer confidence is important for people who have discretional income in order to switch from saving to buying.

Government Spending

The government spending is looked at carefully mainly because of its size and influence that it has on the economy. Not only that, but it is very influential in other ways as well. With the special expenditures on things such as military spending, it is able to help boost unemployment rate, as well as promoting investment spending.

Sources For Economic Information

You can find cutting edge information on upcoming economic indicators in pretty much all of the leading newspapers like the Financial Times, Wall Street Journal and the New York Times. However, for most people, the internet is still the best place to go for information. Since the internet is updating 24/7, this is where the majority of forex traders find their information.

Even though there are many different websites out there that will give you upcoming information on economic announcements, some of the more trusted ones are CNN Money, Bloomberg.com and MSN MoneyCentral. You can also check out the New York Federal Reserve's website, which also has economic indicators and a calendar for upcoming announcements.