Forex Leading Economic Indicators Strategy
Leading or lagging economics news or economics indicators are very important to predict the way of market trends. Of course, this method still has to be filtered with a technical strategy to calculate the entry point from the key level of support resistance in a four-hour or daily time frame. Most economists talk about where the economy is headed – it’s what they do. But in case you haven’t noticed, many of their predictions are wrong. For example, Ben Bernanke (head of the Federal Reserve) predicted in 2007 that the United States was not headed into a recession. He further claimed that the stock and housing markets would be as strong as ever. As we know now, he was wrong.
Because the pundits’ predictions are often unreliable – purposefully so or not – it is important to develop your understanding of the economy and the factors shaping it. Paying attention to economic indicators can give you an idea of where the economy is headed so you can plan your finances and even your career accordingly.
There are two types of indicators you need to be aware of:
- Leading economic indicators often change before large economic adjustments and, as such, can be used to predict future trends.
- Lagging economic indicators, however, reflect the economy’s historical performance and changes to these are only identifiable after an economic trend or pattern has already been established.
So, here is more explanation about leading and lagging economics news that we can use as indicators below :
| LEADING ECONOMIC INDICATORS:
1. Manufactures
2. Retail Sales and WPI m/m (wholesale price index) 3. Building Permits and Housing Start
4. Home/Housing Sales
5. Business sentiment
|
LAGGING ECONOMIC INDICATORS:
|
Attention
Usually, lagging economic indicators affect temporary volatile prices in the market, it’s very different from leading economic indicators that can give more effect to trend strength power so it would have a more consistent effect on market trends.
For example, industrial production, service PMI, and factory orders have a green or positive value after release, so then USD/xyz pairs will grow smoothly and the result up trend will be formed.
You can read about leading economics descriptions on each news in the Forex factory calendar or Trading Economic Calendar Website.
Combine this fundamentals analysis with liquidty forex strategy in getting more profit weekly.
I hope with this article, we can be wiser to analysis in forex market before we make some trading decisions, and my suggestion we combine those leading economic indicator’s values with pin bar or doji on four-hour and daily levels as key-level entry to minimize our risk and get a big reward from forex market and remember using best honest brokers list below because this candlesticks pattern is very important as the confirmation signals.
