4111
'Kunle Adeyeri
There are three sets of traders which are fundamental, technical or a combination of both. They rely on indicators to determine their trading decisions. Hence, trading indicators are classified into two; economic and technical. Fundamental traders make use of economic indicators while technical traders make use of technical indicators. Even though economic indicators have impact on trading, they often fail at times in the direction the market ought to follow when released. Technical indicators are superior to economic as they are written based on pure price actions. There are times also, depending on the time frame, when technical indicators support fundamentals (economic indicators)
Indicators are statistics used to measure current conditions as well as to forecast financial or economic trends. Economic indicators are statistical metrics used to measure the growth or contraction of the economy as a whole or sectors within the economy. Technical indicators are used extensively in technical analysis to predict changes in stock trends or price patterns in any traded asset. In fundamental analysis, economic indicators that quantify current economic and industry conditions are used to provide insight into the future profitability potential of public companies.
Economic indicators
There are many economic indicators created by different sources in both the private and the public sector. For example, the Bureau of Labour Statistics, which is the research arm of the U.S. Department of Labour, compiles data on prices, employment and unemployment, compensation and work conditions and productivity. Within the price report is information on inflation, import and export prices and consumer spending.
The Institute for Supply Management(ISM) is a not-for-profit professional association for supply management and purchasing professionals. It has published its ISM Manufacturing Report on Business monthly since 1931. The report contains a composite index, the Purchasing Managers' Index (PMI), which contains information on manufacturing and non-manufacturing orders. The index is a closely watched barometer of economic activity. The U.S. Department of Commerce uses ISM data in its evaluation of the economy.
Others include interest rates, the money supply, housing index and consumer sentiment.
Technical indicators
In the context of technical analysis, an indicator is a mathematical calculation based on security's price and or/volume. The result is used to predict future prices. Common technical analysis indicators are the moving average convergence-divergence (MACD) indicator and the relative strength index (RSI).
The MACD is based on the assumption that the tendency of the price of a traded asset is to revert to a trend line. In order to discover the trend line, traders look at the moving averages of asset prices over different time periods, often over 50 days, 100 days and 200 days. In addition, moving averages can be either simple or exponential.
The RSI compares the size of recent gains to recent losses to determine the asset's price momentum, either up or down. Using tools like the MACD and the RSI technical traders will analyse assets' price charts looking for patterns that will indicate when to buy or sell the asset under consideration.
In as much as I am a technical trader, I support technical indicators over economic and I have got some special ones which I sell for a few bucks with proper training or explanations on their usage. I have used them for more than seven years and they actually work. My training also dwells on technical tools for trading.
Enjoy the last 50% discount on training fee for the year by enrolling for March batch (online, weekdays and weekends) which commences on Monday 28th March 2016.
Online trading is a second chance class of financial empowerment. Don't miss it!
Reference: www.nvestopedia.com
TRADING TIPS/SIGNALS FOR THE WEEK MONDAY MARCH 07 – FRIDAY MARCH 11 , 2016.
Entry Suggested Entry Price (SEP) and exit Take Profit/Stop Loss(TP/SL) could also be at trader's discretion. Entry (SEP) and exit (TP/SL) may also occur on or before or in-between the stipulated period. Money management strictly is advised.
EURJPY (BUY LIMIT): Suggested entry 124.40 – 124.75. [email protected][email protected][email protected] Expected pull back downward may occur before SEP.
GBPCHF (BUY LIMIT): Suggested entry 1.3985 – 1.4000 . [email protected][email protected]
GBPUSD (BUY LIMIT): Suggested entry 1.4088 -1.4148. [email protected][email protected] .[email protected] Expected pullback downward is expected before SEP.
EURUSD (BUY LIMIT): Suggested entry 1.0950 – 1.0960. [email protected][email protected] Expected pull back downward may occur before SEP.
USDCHF (SELL LIMIT): Suggested entry 0.9928 – 0.9970 . [email protected] Expected pull back upward may occur before SEP.
Visit our website www.kardsfx.com or Ikeja office (2nd Floor. 67 Obafemi Awolowo Way. Opposite Olowu Bus Stop) for more assistance on your investment or account management, account opening and training . Terms and conditions apply. Registration for March 2016 Batch training commences on Monday 28 March. Enrol now for your weekday, weekend or online class. Call 01-3429029, 08039391041, 08148405500 or send a mail for details to [email protected] or [email protected]
Copyright PUNCH.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.
Contact: [email protected]
