FX trading investors know that the key to successfully utilizing a forex trading platform is to make predictions about the economic climate. Forex trading hinges on reading the economic status of a country in order to accurately guess whether its currency will be increasing or decreasing. The economy is a fickle thing, and as the 2008 crash taught us, anything can create a slide that is difficult to stop once it begins. Being able to identify the factors that cause these declines is important; the people who recognized the bad mortgages and worse insurance deals that were being done probably made a fortune in the decline of the US dollar. But possibly even more important for forex brokers to be successful is noticing the clues that suggest currency movement. These factors are not the actual causes, but they instead hint at future decrease or increase in currency value. Acknowledging these factors will allow for profitable FX trading.
Initial Jobless Claims Report
The Initial Jobless Claims Report is one such economic indicator that could be used to verify a dramatic shift in the health of the economy. The workforce is one of the most important factors in economic strength. When citizens do not have jobs, they do not have expendable cash and they cannot support the economy through purchasing products. This is very basic, but obviously worth noting. It also means that employment rates can be one of the first indicators of a declining economy.
The Initial Jobless Claims Report provides information on the latest figures for jobless claims. It gives the data for citizens receiving unemployment benefits and the changes on a weekly basis.
FX Trading Significance
Significant changes in the number of jobless claims could indicate massive layoffs caused by lack of interest in market products, meaning a potential for economic decline. If job growth slows or decreases for a substantial period of time, then recession or additional layoffs could be on the horizon. The more unemployed, the less goods being purchased, meaning less money for employers to pay their workers, which could lead to further unemployment.
Before making a deal with your
forex broker, understand that the figures for the Initial Jobless Claims Report are often volatile, with large swing week to week and month to month. Anything less than 30,000 claims difference up or down should be considered normal fluctuation. Therefore, this is not one of the best
forex resources, but it is still worth investigating as an economic indicator.
Free Forex Demo Account
If you are interested in learning the basics of FX trading, but afraid you will blow all your money in the first week, open a free
forex demo account. These practice accounts allow new comers to try their hand at using a forex trading platform for currency trading, without risking their own hard-earned money. After practicing and learning the trick of the trade, including observing forex resources and reacting to forex news, then the individual will be ready to invest for real with a forex broker.
