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When you are trading in the Forex market, one of the most important things you need to do is to keep a track of economic indicators of the different countries you are trading with. If being a Forex trader, you are not keeping an eye on the economic data releases such as GDP, NFP, CPI, employment rates and inflations rates, it is highly unlikely that you will be successful in the trade market in the long-term.
Keeping a close check on the recent news of economic indicators, even before they reach the market, is one of the key habits that set apart successful Forex traders from other players in the market.
One major reason why most Forex traders do not keep up with the habit of monitoring economic data releases is the difficulty they may face in keeping track of when the news regarding these several indicators might be coming into the market. There are a large number of economic indicators that need to be observed and the number is rising constantly. The release timetable for all these indicators varies widely; some are made available on a yearly basis while others can be provided even on a weekly basis.
Moreover, the increased use of electronic exchange and the constant upgrades of the information on online sources make it even more difficult to keep track of all changes in a systematic and efficient manner. Keeping track of a dozen economic indicators, each day can surely get overwhelming for many Forex traders. While many traders depend on their Forex brokers in such situations most of the time, it is still quite a hefty task to monitor all bits of economic data releases regularly.
Another reason why economic data releases are neglected by traders most of the time is the complex nature of information, their inability to comprehend the economic jargon and draw conclusions on their basis. In order to understand and more importantly, use this information to their advantage, it is very important that the Forex traders have some knowledge regarding the macroeconomic principles and concepts. This often makes these traders ignore information that may prove to be vital for making successful decisions in the Forex trade market.
The third and most common reason why economic data releases are usually ignored by many Forex traders is the fact that they fail to understand their importance in the Forex trade market. Moreover, the complex but interrelated nature of the relationship between these indicators and Forex trade market makes it quite confusing for the new traders to draw a conclusion regarding any relationship. This confusion is sometimes the biggest hurdle that makes traders ignore these economic data releases.
However,
the fact remains that in order to be successful at Forex trade, the need to understand these economic indicators and their effect on the trade market is very important. If you lack the ability to make safe and calculated assumptions about the future direction of the market, you stand to risk a lot financially. The ability to make these future assumptions can only come from the close study of several macroeconomic
