Basic Economic Indicators in forex trading

Economic indicators refer to the data which includes both economical and financial, published by the private agencies and the government. This public is published on the regular basis so that business community can be aware of the economic and market situation. Those who consider the business as the religions refer the economic indicator as Bible. Since, so many people are anxiously waiting for this data; it becomes so powerful that many a times it causes a major change in the market. As a new player in the market, you might now know that one doesn’t need to have a master’s degree in economics to understand the data of economic indicators. One just need to take the basic guidelines so that he can understand, analyze, track the market to make the better decisions.

The initial thing you have to keep an eye on is the release time period of the economic indicator data. It is recommended to mark that date on your calendar so you can get to know at the spot.
If you keep an eye on the economic indicators, it will help you to understand the movement of the market. For example, a company was spiraling downwards from the start of the week. At that time, a majority of the trader would be holding a shorter position of the company. Since, the company is going to release its data at the end of the week; it is likely that company will see a speed up of the market towards the end of the current week. The reason behind this pace is that now traders are thinking to leave the short position. No doubt, the economic indicator causes a change in the market. It could be directly or indirectly as it depends on how traders will interpret the information.
If you want the data to work for your benefit, you first need to understand what is meant by that data. This way, you will be able to know that through which indicator market growth is measured and which indicator causes inflation. After spending some time with the data figures, you will finally get to know the data terms that are used for the growth of the market.
Through the help of the market indicators, you will get to know the information regarding any part of the market. This is because maybe something is important for you at the moment, and then it becomes less important in the coming times.
You must keep in mind that foreign exchange always has dual sides. Therefore, you must carefully understand the data contained in the economic indicators in the reports of U.S. and Europe. In case you are going to do trading in the currency of another country, then first you need to look at the economic indicator data of that country and then do look at the data from the US.

Some key economic indicators
GDP:
GDP refers to the Gross Domestic Product. It includes the detail of all the goods, and services produced within a country either through foreign or domestic companies. This indictor helps in estimating the economic growth of the country.
Production of industry:
This refers to the total production of a country through the industry. The industry includes factories, mines, and utilities. This watches a nation’s capacity over what has been used and how much is left. Manufacturing covers over ¼ of the economy.
PPI:
PPI refers to the Producer Price Index. This refers to the movement of price in the manufacturing department of the economy. This usually includes finished goods, intermediate goods, and crude goods. It contains the detail of selling prices that are recovered from the local producers.
CPI:
CPI stands for the Consumer Price Index. It includes the price details paid by the urban consumer who includes more than 80% of the market for the goods and services. It includes the price details of more than 200 categories.
Retail Sales:
The retail sale is a report that includes the receipts recovered from the areas that occupy of different sizes and business across whole US. This tells about the trend of consumer spending throughout the year in every department of the whole economy.