Forex economic indicators are the pieces of economic and financial data, which have been published by different governmental or private agencies. These statistics are made public on the regularly scheduled basis, and also they help the market observers to monitor the economy pulse.
Forex economic indicators can have the heavy impact on the currency market. It happens because the big amount of people reacts simultaneously to the economic news release in the same way. While it may seem that the advanced degree in economics would be helpful to analyze Forex economic indicators, the reality is that there is no need in the specific education. All you need is learning a few main economic indicators and how they can changethe market situation.
A trader should know when every of Forex economic indicators is about to be released. Due to that, it's necessary to keep the calendar on the desk or trading station. The calendar should contain the date and time when every stat is about to be made public.
It is important for every trader to be aware when the specific Forex news are being released. It can be done through the forex news calendars that you can find on many forex related web-sites.
Alternatively, you can use powerful Analytic Plugin for the Metatrader Platform which displays all upcoming News directly on the chart is FX Pulse. Read more about FX Pulse 3.0.
Each of the forex economic indicators can move the market up or down depending of the content. Although, it is very important to know how the specific change in indicators' value will impact the market. For example the increasing of Gross Domestic Product (GDP) in USA will most likely cause the rising of USD against all the other currencies. At the same time, growing Producer Price Index (PPI) in the USA might cause the inflation's increase thereby pushing down the price for USD.
Different economic indicators have different power on the forex market. Some of them, like Nonfarm Payroll (NFP) or GDP, can cause major movements on the currency market, while the others are not that important.
One more important thing to understand is that the data itself don't move the market. What really matters is the deviation between the expected and the actual numbers. If the difference is high enough, there is a big chance that the market will react on it sharply. So in order to gain profit during the news releases, it is necessary to know what numbers are expected to be released.
It is important to remain calm while trading on forex news releases. Right before the release, market will be very volatile. It is important not to enter the trade at that time, because you might face significant loss.
These rules are quite simple to follow, but they give excellent understanding of the market situations and excellent profits as the result.