The foreign currency exchange (forex) market is a game of speculation. No one knows, with certainty, which currency will rise in value… and which currency will suffer in weight.
Let’s have a closer look at some of the factors that can help you to make more profits.
The Gross National Product (GNP) – this measures the economic performance of the said country.
The Gross Domestic Product (GDP) – this is similar to the GNP.
Industrial Production – this refers to the total output of the country’s industrial resources such as its utilities, plants and mines.
Capacity Utilization – this is a fairer gauge of the economy’s strength because it measures the same by comparing industrial output vis a vis the total production capability.
External Investments – how many foreign companies trust the country’s economy and have set up shop on its shores?
Your day trading success will also depend on the financial factors at play in the subject country.
Most notable of these financial factors is the inflation rate. Inflation is measured by studying the consumer price index (CPI) and comparing it with the producer price index (PPI). These numbers refer to changes in the price of commodities in their respective markets. If the CPI and the PPI are consistently high, then inflation is on the rise and this can be attributable to socio-economic and/or political factors at play which can jeopardize your forex day trading strategy.