Investing and trading can take on many forms. You can trade stocks, bonds or pretty much any commodity you can think of, without leaving the chair in front of your computer. But you need to have a plan. You need to have a viable strategy to work and profit off the trades that you make. You cannot just wing it. And you need to really be able to test out your strategies and learn the markets before you risk actual money. Or be able to play around with extra money that you can afford to lose.
Paying attention to the news and how it affects the market is important no matter what kind of trading you are doing. Looking at economic indicators across the globe is important, but so is focusing on the United States. The movements and data coming out of the United States economy can have enormous effects on the rest of the world’s financial markets because it is the biggest economic engine the world has ever seen.
Trading on economic indicators is a strategy that you can employ to make money in lots of areas, but financial derivatives can be profitable, if you are doing it right. CMC Markets are ripe with opportunities in spread betting, forex and contracts for difference, or CFDs. There are many strategies to choose from on a particular day of trading, from working off news events, to straighten technical indicators and following chart patterns, but economic indicators can be your best bet some days.
Almost every day, economic data is released into the news world, affecting markets and moving prices up or down. When that happens, it means that there are opportunities to make money. As always the key is to understand which economic indicators really are looked it with intelligence and vigor by experience traders.
Oil prices drive a lot of economic activity. And oil company stocks and indexes, or groups of fossil fuel stocks, can move quite a bit surrounding the release of government reports on oil prices throughout the globe. And not only government reports can have information on oil reports and barrel prices. There are country level institutes that put out respected data as well as NGOs that look at the state of the market across the globe. Seasonality is also an important factor to consider when looking at petroleum stocks and the price of a barrel of oil. Historically, from December to May, heating oil markets spike about 50% versus the June to November period. So it is not just gasoline prices and car activities that make a dent in the oil market.
Government reports on consumer spending can have a significant effect on the rest of the marketplace. When you take a look at spending patterns, you can start to make certain general inferences that can be beneficial to your trading. If spending is increasing in retail sectors, that means that demand for goods is rising. Which can put upward pressure on companies to spend on employees, shipping and production. Which can mean that certain commodities can see an uptick in price. In the United States, the Department of Commerce comes out with retail sales data on a regular basis. In Europe, traders can rely on the European Commision for many similar economic indicators. Beyond government sources, looking to international institutes that put out respected reports can help in your search for quality economic indicators.
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