Category Archives: Information about other Financial Markets and Products

Types of Economic Indicators

In Forex trading, investors utilize fundamental analysis to help make those all-important trade decisions.  This type of analysis looks at various economic indicators (and political ones as well) to help determine trends in the Forex market, which can then be utilized in developing Forex market strategies.  Without this knowledge, Forex trades would be made in a vacuum, which could ultimately spell trouble.  These vital economic indicators can be divided into three main groups, as shown below.

Leading indicators

Leading indicators are exactly what the name suggests – they lead, or predict future events before they actually occur in the economy.  It’s the stuff that economists love to use to make those famous economic predictions that you often hear in the news.  In other words, if a leading indicator shows decline, then the economy will often decline.  If, however, a leading indicator suddenly improves, then the state of the economy will probably improve.

So what exactly are some common leading economic indicators?  A few of the tops ones are the U.S. housing market (specifically new home sales, building permits, and housing starts) and stock market returns.  For instance, if new home sales plummet in three straight months, it could signal a trend that consumers will be spending less overall, for such things as home furnishings and mortgages.  That, in turn, would negatively affect the economy, and eventually a nation’s currency exchange rate.

Lagging indicators

These types of indicators lag behind changes that occur in the economy.  Even though it might seem pointless to monitor these kinds of indicators (since the economy has already turned), they are valuable for confirming trends.  For example, one of the more important lagging indicators, the unemployment rate, might show a positive change only three or four quarters after an improvement in the economy.  This would then certainly confirm a continuing positive trend in the economy.

Coincident indicators

Coincident indicators occur about at the same time of an economic change.  They don’t predict or confirm economic events.  However, they can still be useful in confirming a particularly new economic movement or event in its first few weeks.  An example of a coincident indicator is personal income:  a higher than average personal income would coincide with a strengthening economy.  The Gross Domestic Product (total market value of goods and services for a country) is another example of a coincident indicator.

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SaxoWebTrader

SaxoWebTrader has been launched in May 2008.

Saxobank say “It marks a new era in trading. Not only does SaxoWebTrader enable you to trade multiple asset classes, it allows you to personalise your account interface. You can choose from an array of charts, prices, market research, data sources and news feeds. You can also access your Saxo Bank account from your mobile phone or PDA on SaxoMobileTrader.”

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IG Index – Trailing Stop Loss

The Online trading market continues to inovate and for those of you working to a sensible risk focussed approach, stop losses are more and more essential. Now what if the stop-loss was dynamic.. always looking out for you best interest..

 

IG Index have introduced (2008) trailing stop losses.This is similiar to some other facilities but a noticeable step forward. It’s good to see a major platform introducing features we help the customer – i.e. you and me.

Their press release said “We are committed to giving you more. More markets, more trading tools, the best dealing technology. We were the first to offer spread betting on shares in 1995. Now we cover over 7000 individual shares, plus indices, forex, commodities and more….” and continues ” Our new Trailing Stops help you lock in your profits:

  • Your Stop level adjusts with the market
  • Secure your gains as the market moves
  • No charge for setting a Trailing Stop”

We look forward to bringing your more news and feedback as and when we can.  If you have any comments, please get in touch.

What is a CFD or Contract For Difference (CFDs)

What is a CFD, we all here about CFDs and CFD trading, but what is a Contract for Difference, find out in this inrtoduction

Introduction to CFDs / Contract for Difference

What is a CFD?

CFD or Contract for Difference is an agreement between two parties to exchange, at the close of the contract, the difference between the opening price and the closing price, multiplied by the number ofreference shares specified within the contract.

The ‘reference shares’ are the underlying shares specified in the CFD. The economic performance of a CFD is determined by the performance of the underlying reference shares.

Although CFDs replicate the price movement of the underlying reference shares, they convey no right or requirement to acquire or deliver the physical shares. (i.e. you don’t actually own the shares)

The contract value of a CFD is defined as the number of reference shares specified in the contract, multiplied by the price of the underlying reference share. If you take a long position, you will make a profit if the contract value increases. Conversely, if you take a short position, you will benefit if the contract value falls.

You can, therefore, profit from both rising and falling share prices. It is important to note that CFDs are a margined product and as such are not suitable for all investors. Due to the leveraged nature of the product you may loose far in excess of your initial investment.

You can find out more about CFDs at www.StartTradingCFDs.co.uk