Foreign exchange exchanges, also known as Forex trading, have become more and more popular with investors and traders nowadays. With the current recession in the capital markets, many people think that the purchase and sale of currencies are a safe investment. Whenever you examine the mechanisms of a currency exchange, the chances of making money are somewhere on 50%. With each transaction on site currency, someone loses money while the other individual makes one. Despite this, everyone is not profitable currency. In fact, it is estimated that nearly 80% of all merchants deserves money in their attempts.
Using these statistics, we can easily assume that the 20% of profitable traders have access to a kind of initiated info or in a mysterious way of manipulating the market. But even the governments of the United States, British and Japanese have systematically failed in their previous attempts to manipulate the currency markets of the world; which tangles this possibility together.
The fact is that profitable currency traders are simply better to use accessible information than their unprofitable counterparts. Proficable traders know how to choose the most applicable information of the huge pile of economic data published by governments and institutions one day day. They understand how to expand overloaded information and zoom it exclusively the most important facts and figures that are most likely to have an effect on the currency market. In this spirit, it is the five main national economic relations that each trader who succeeds examines:
Unemployment reports. Unexpected surprises in unemployment figures generally have a significant impact on the foreign exchange market. If, for example, the anticipated unemployment rate is 6% for a specific country, but the report shows a real rate of 4%, then this can lead to a strengthening of the national currency.
Interest rate. Interest rates are directly related to the strength of a specific currency. When interest rates are progressing, it pulls into foreign investors and drive to a stronger currency. The opposite occurs when interest rates go down.
Consumer price index. The CPI is a monthly report that measures the costs of goods in a country and compare it to salaries. A steep hike in inflation is always damaged by the strength of a currency and it is therefore essential to keep a narrow eye on this economic indicator.
Trade balance. The trade balance measures the amount of country exports and the amount of import. A commercial deficit means that exports surpasses imports and a country send more money than that. This has a very significant impact on the demand for country currency. But you have to remember that a trade deficit is not always a bad thing. It is necessary to take into account the specific conditions of a country to understand why a surplus or a commercial deficit exists.
Retail sales. A monthly retail sales report may be the most effective indicator of the reflections of the average person on the economy of his country. The feeling plays a very critical role in the modes of expenditure, which, in turn, affects the strength of a coin of a nation.