Currency markets (Forex) are sensitive to changes in economic indicators. These signs not only reflect the total economic condition of the country but also directly affect the value of the currency and trading strategies. Understanding the effects of interest rates, GDP, and inflation is essential for traders seeking to make informed decisions in the Forex market.
Learn more about how DotBig Broker helps its clients understand the current economic conditions and make a profit from trading from the blog below.
Basic Economic Indicators
Forex trading depends on many aspects, and of course, the main one is the economic situation. To trade, the user should learn about important economic indicators, as they strongly influence the result.
There may be several indicators for forex traders, and all of them are important, but some of them are the most important and have a very accurate indication rate.
- Gross Domestic Product (GDP)
GDP is the most important indicator of economic development. The process of compiling GDP reports is so lengthy that many parts of it become known even before its final publication. As a result, the GDP growth rate turns out to be very accurate.
A positive sign is considered to be stable GDP growth over several quarters while within or better than forecast values. Market participants tend to take the decline in the indicator for two consecutive reporting periods as a sign of the beginning of a recession in the economy and a signal to reduce positions.
- Non-Farm Payroll
Wages outside agriculture are one of the most important economic indicators closely related to the US GDP. Why does this matter? One important reason is that it also affects the monetary policy of the United States, which is directly related to the Forex space.
- Unemployment rate
Employment is also considered one of the most important macroeconomic indicators. The rising unemployment rate indicates a deterioration in the situation in the country and the problems of companies. Improvements in the labor market are a positive signal that indicates stability in the economy and business and an increase in consumer demand. The stock market also reacts accordingly – with an increase in employment, stock prices show an upward movement, with an increase in unemployment – downward.
- Consumer Price Index
The consumer price index, also known as the CPI, gives us an idea of how fast prices rise or fall. Since monetary policy was also influenced by the CPI report, it could have a huge impact on the forex markets. Again, the greatest impact is usually the deviation from the predicted results. For example, if the CPI value is much higher than expected, it signals that monetary policy will tighten as we move forward.
How Does DotBig Help Traders Stay Informed of the Economic Scene?
DotBig Forex broker provides experienced analysts and an automated system that notifies traders of crucial events in various markets. What are the broker’s signals helpful for? Here are some examples below:
- Ready-made recommendations. Online traders don’t need to analyze the market themselves by browsing a huge number of online resources (social networks, mass media, etc.).
- Minimizing risks. Each DotBig site trading signal is the result of careful work by experienced analysts. Using the exchange’s signals, you will significantly reduce the risk of losing investments. The platform’s analysts conduct detailed technical and fundamental analyses, as well as monitor reputable sources of information.
- Learning and improving skills. Professional traders always conduct their market research and build their strategies. You can compare your analyses with the recommendations of DotBig analysts, thereby learning from real-world cases.
DotBig economic calendar
Many traders miss out on great earning opportunities just because they don’t keep track of key events in the economic field. Real success is achieved only by those who follow the news, for example, when data on GDP, inflation, unemployment, interest rates, and other crucial indicators affecting the markets are published.
The DotBig trading platform displays all significant events in a convenient format in the form of a table:
- Date selection. You can specify the period for which the events will be displayed.
- Time. In the calendar, you can see the exact time the event will occur.
- Event. The broker specifies the exact name of the news. It is a link to a separate page with a detailed description, schedule, and history of index changes.
- Current value, previous value, and forecast. In this part of the table, you can find out the current index/ indicator, what it was previously, as well as what value the leading analysts predict.
After learning how to use the economic calendar, you will use various filters to narrow down the list of countries and find events that have the greatest impact on the markets.
Benefits of Trading on DotBig
DotBig Investments is one of the universal intermediaries in the financial markets, which provides clients with access to trade various assets from stocks to commodities. The broker provides convenient trading conditions for both beginners and experienced traders. Investors get the opportunity to trade Forex in manual or automatic mode, they can use analytical tools, a mobile application, and training materials.
Each broker has both advantages and disadvantages. When studying the reviews, most DotBig Forex customers were satisfied with the quality of its service and trading conditions. One of the company’s strengths can be considered a well-thought-out investment training system from scratch.
Advantages of trading with DotBig exchange:
- Negative balance protection;
- Wide trading tools and conditions for beginners and experienced traders;
- Automatic trading option;
- Availability to join an affiliate program for passive income.
As the DotBig reviews stated, the broker’s shortcomings are uncritical. The main advantage of the company is its honesty towards customers. New and experienced traders receive a security guarantee and access to professional analytical and trading tools on the platform.