News Reading Strategy Before Starting Trading
Reading daily forex news is an activity that must be done by traders. The reason is, through the forex news information, traders will find a lot of insight about world economic developments, trading analysis, and can be a reference in making trading decisions.
Forex news is not the main reference in trading. But in fact, often the information from the news is very useful for the trading activities that traders do. Daily forex news can help a trader in making more informed trading decisions and make traders more careful.
Understanding Daily Forex News
The information contained in the forex news is often needed to perform fundamental analysis. As traders know, fundamental analysis is greatly influenced by news from various events that occur in various parts of the world. The news will affect market movements, currency values, stocks, policies, and various other important things.
An experienced trader will definitely not be careless in taking a trading position before doing fundamental analysis. By doing fundamental analysis, a trader will be able to predict market conditions and trends before trading. It's not necessarily 100% accurate, but fundamental analysis will help a trader to be more careful when selling or buying. To perform fundamental analysis, some of these forex news are grouped into several categories. Each of these categories usually appears on the daily forex news and should be listened to and understood by a trader.
ISM-MI (Institute of Supply Management-Manufacturing Index), is the result of a survey involving the manufacturing industry and also purchasing managers, especially in the United States. This information is usually released each month on the first day of business hours. This ISM-MI information is used to determine the manufacturing index. If the value of the ISM-MI rises, it is certain that the currency in the country concerned will also strengthen.
Trade Balance, is the value of the difference between the value of exports and the value of imports contained in a country. If the value of the trade balance is indicated by a minus value, then this situation indicates that the amount of imports is greater than the value of exports. On the other hand, if the trade balance value shows a positive value, then this value indicates that the number of exports is greater than the number of imports. Forex fundamental news that shows a positive trade balance value in a country also indicates that the value of that country's currency is getting stronger as well.
CCI (Consumer Confidence Index), daily forex news about CCI is usually released at the end of the month. CCI is an indicator that shows the level of confidence of consumers and consumer pairs on the state of the economy in the future. If the CCI value is high, then this shows that consumers believe in the state of the developing economy. This stronger trust certainly makes the value of the currency even higher.
GDP (Gross Domestic Product), If daily forex news related to the value of GDP increases, the currency of a country will also strengthen. This GDP value shows the value of production contained in a country.
PPI (Producers Price Index), this value is used to mark the inflation rate from the producer side. If the value of the PPI issued every month shows a value that continues to increase, then the value of the currency will also experience strengthening.
PMI Chicago (Purchasing Manager's Index), This value shows the level of purchasing manager spending which is dominated by the manufacturing industry, especially in the city of Chicago, United States. If the Chicago PMI increases, the USD will also strengthen.
Money Supply, the value of money supply that has increased will make the value of the currency also increase. The value of this money supply shows three important things, namely the amount of bank loans to the public, the amount of money circulating in the community, and the amount of debt that has not been settled by the government.
Interest rate statement, Daily forex news regarding the interest rate statement is issued every month on a regular basis by the central bank in a country. This interest rate statement contains interest rate policies which will later be used as guidelines by other banks. This interest rate policy will certainly affect the amount of credit interest rates, savings interest rates, deposit rates and other banking policies.
NFP (Non Farm Payroll), This value shows the amount of value issued by the government to pay salaries in fields outside the agricultural sector. If the NFP value increases, then the currency value will usually increase quite drastically.
CPI (Consumer Price Index), if the PPI value shows the inflation value from the producer side, then this CPI value indicates the inflation rate from the consumer side. A high CPI value indicates high consumer confidence as well.
Retail sales, is one of the fundamental forex news that displays total sales in the goods sales sector. If the value issued near the middle of this month shows a value that tends to continue to increase, then the value of the currency will also increase.
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