Most people who get involved with free forex training aren't able to understand the importance of the US Non-Farm Payroll report to financial markets on a global basis . I often get the question , "why does the monthly US jobs number led to ups and downs in the market?" To provide an answer to the question it is important to look at what is represented by the US jobs number . Then we will have our insights as to why it makes the markets move like nothing else .
On the very first Friday of a new month, the US Non Farm payroll is then released. This report is put out by the US Bureau of Labor and Statistics and what it quantitatively measures , is the number of brand new jobs, excluding farming, created in the prior month by the US economy . This announcement is so important because it reflects the overall health of the US economy and thus the global economy . In reality , in the world, the US economy happens to be the largest and consumer spending is the main component driving the economy in the US ; actually making up 70%! Thus , in free forex training, because the weakness or strength of a currency in a country is mainly affected by the interest rates in the country , one must look to what drives the actual interest rates themselves ; or the US Federal Reserve policy on interest rates. Probably the most important data for the Fed to use is this job report in order to set their short term interest rates and because of this, this report can and usually does , cause significant volatility across the markets .
Why does this report have anything to do with the short term interest rates set by the Federal Reserve? That's a good question ! If the jobs report is on the strong side that generally means that people are employed and resource utilization is high . This also means that companies are employing workers and the consumers, or workers, are then spending money by shopping, dining out, or on clothing, and the economy is driven by these things ; they make the economy grow or heat up . There is more money in circulation when the economy is growing and keeping inflation in check is very important for the Federal Reserve. They can keep inflation in check and lower inflation by raising the short term interest rates, which cools the economy down , or they can raise inflation by lowering the short term rates, heating the economy up. As you can see , so a big factor is the jobs number, beneath the surface driving this .
The next time you are trying to prepare for a free forex training day or the next week , take a look at the fundamental information on the events calendar that will be released in the next day or week . If it's the first week within a month then you'll have the Non-Farm Payrolls report to look forward to on Friday of that first week because that is when it always comes out . If you're looking to take advantage of the volatility that comes after the release of the jobs report , just remember the following formula : If the jobs numbers are stronger than expected this usually means a stronger economy which means higher short term interest rates that lead to currency strength . On the other hand , if there is a weaker than expected jobs report then this usually means lower short term interest rates that lead to currency weakness . It's not always so black and white , but knowledge of these general parameters will give you a leg up on your fellow trading competitors .
David F Dacosta - Is a private trader using technical analysis to do free forex training & futures trading. David makes specific trade recommendations for a small select group of traders. He uses drummond geometry to make his forecasts. Click Here for training materials and a free forex trading forecast.
Wednesday, October 20, 2010
Thursday, October 7, 2010
Basic Money Management And Free Forex Training
Free forex training gives anyone, anywhere, the opportunity to make a very nice living . What better way to make a living than waking up every morning, enjoying a cup of joe , and then setting up the trading day while in your pjs ? Pretty easy ! Hang on because while it can be that easy and relaxing most people quickly find out that it is not that easy at all . That's why this article is going to look at principles of money management - because if you know the basics of money management success is more likely for you.
So why, if this area of money management is so very important , do so many people ignore or overlook it ? That's a great question and one you need to take a hard, long look at if you want to succeed . I think that this aspect of trading is skipped by people, money management basics , because it is not "sexy" . After all , how many really interesting accountants do any of us know ? That's what this is really about ; boring numbers and more boring numbers .
With all of that said , it is only boring if you chose to think about it and approach it as such . If you look at this as boring, it will be boring and it's something you won't want to do. If you look at this as an important key to becoming a free forex training professional and you keep focused on the possibility of success ahead if you spend some time thinking your tactics for money management through.... then it can turn into something that is exciting.
Now you're convinced that this area needs to be focused on . Awesome! What is it all about then anyway ? Here are the keys in order of importance , you'll have a great start if you follow them : over leveraging yourself should never be done, the leverage on each trade should be consistent , add to winners and do not add to losers . That's it . There are some tributaries of course to all of the aforementioned but they are incredibly powerful even all by themselves .
When you are trying to figure out why your trading level hasn't advanced the way you wanted it to , keep in mind the money management keys . Another final thing to keep in mind is this: unimaginable psychological benefits can be provided by good money management. And these psychological benefits will improve your trading beyond what you ever thought was possible . Why? If you're not afraid of losing money , or you know you have a solid plan in place that will ensure you're always around to trade another today , then you can look at markets from a state that is relaxed and clear and for your efforts you'll add some serious dividends.
Free forex training can be one of the most challenging and rewarding things ever . Remember that the most valuable keys to your success are often the most simple and probably uninteresting things staring you right in the face . You've wanted to find the trading holy grail - and money management is it .
David F Dacosta - Is a private trader using technical analysis to do free forex training & futures trading. David makes specific trade recommendations for a small select group of traders. He uses drummond geometry to make his forecasts. Click Here for training materials and a free forex trading forecast.
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So why, if this area of money management is so very important , do so many people ignore or overlook it ? That's a great question and one you need to take a hard, long look at if you want to succeed . I think that this aspect of trading is skipped by people, money management basics , because it is not "sexy" . After all , how many really interesting accountants do any of us know ? That's what this is really about ; boring numbers and more boring numbers .
With all of that said , it is only boring if you chose to think about it and approach it as such . If you look at this as boring, it will be boring and it's something you won't want to do. If you look at this as an important key to becoming a free forex training professional and you keep focused on the possibility of success ahead if you spend some time thinking your tactics for money management through.... then it can turn into something that is exciting.
Now you're convinced that this area needs to be focused on . Awesome! What is it all about then anyway ? Here are the keys in order of importance , you'll have a great start if you follow them : over leveraging yourself should never be done, the leverage on each trade should be consistent , add to winners and do not add to losers . That's it . There are some tributaries of course to all of the aforementioned but they are incredibly powerful even all by themselves .
When you are trying to figure out why your trading level hasn't advanced the way you wanted it to , keep in mind the money management keys . Another final thing to keep in mind is this: unimaginable psychological benefits can be provided by good money management. And these psychological benefits will improve your trading beyond what you ever thought was possible . Why? If you're not afraid of losing money , or you know you have a solid plan in place that will ensure you're always around to trade another today , then you can look at markets from a state that is relaxed and clear and for your efforts you'll add some serious dividends.
Free forex training can be one of the most challenging and rewarding things ever . Remember that the most valuable keys to your success are often the most simple and probably uninteresting things staring you right in the face . You've wanted to find the trading holy grail - and money management is it .
David F Dacosta - Is a private trader using technical analysis to do free forex training & futures trading. David makes specific trade recommendations for a small select group of traders. He uses drummond geometry to make his forecasts. Click Here for training materials and a free forex trading forecast.
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