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The impact of economic data on the market and how to deal with it

There are many people who believe that forexdiscountbrokers forexrebatesbrokers news, like news, are just a flash cashback forex the pan, not enough to worry about, the forexbonusrebate will return to its original trajectory after the data I personally agree with half, d forex discount brokersagree and half Why? The reason is that the news and economic data are two different things, and the depth of impact is not the same - the former is mostly short-lived, and will not form a trend, while the latter has a greater chance of forming a trend, and even affect the future direction of government administration news and economic data, the biggest difference is that the data can be expected, and is released regularly. In general, the importance of economic data lies in the economic forecast of a country in the coming period and the current economic performance. Since economic data are statistical data, they are not different from the charts we often see for various currencies (if we graph the data), so the most important thing to look at is the trend. The application of trend awareness is very useful for predicting the future because we (or market participants) not only need to get more accurate information about the current economic situation of a country from the information provided by economic data, but we can also find useful information about the future development from the trend - when the data of an economy is moving upward, we can find out what the trend is. -When an economys data is going up, it is unlikely to suddenly become worse (down), and similarly, if the economy is going bad, it is unlikely to suddenly become better. The "semi-official" explanation of some economic data (including the U.S. non-farm payrolls data) is available in English only for the time being, as it is transcribed from CNN. GDP (Gross National Product) is the total value of production that can be generated by the people in a fixed period of time, including the primary sector (agriculture and raw material production, such as crude oil, timber, etc.), the secondary sector (factory production, including all factory products and construction) and the tertiary sector (including all service industries, such as finance, sales, etc.) in principle. In principle, the larger the number, the stronger a country is, and the smaller the number, the more backward a country is - because the population figures differ from country to country, there is a tendency in economics to use "individual GNP" as a guide to the strength of a society. As you can see, in terms of overall national strength, individual countries can be very strong, but in reality, individual national income is not very high - the best example is China, where we now see GDP as a growth value, i.e., as a percentage of growth, which is also published by governments on a quarterly basis - and in general, if there are three consecutive years of growth, the GDP of the country is not very high. -Generally speaking, if there are three consecutive quarters of negative GDP growth, it will be considered a recession - the usual round is five to seven years of growth and two years of recession which leads to a question - the national economic As a rule, due to the stable development of the modern economy, the authorities of all countries are well aware of the scourge of recession, so they will take action in advance to try to avoid a recession, the blow to the entire national economy - so, as you can see, when the U.S. economy was at its best, the Federal Reserve began to raise interest rates, and China also The reason for this is that the growth of GDP represents a countrys economy and its purchasing power, which will be reflected in the exchange rate, so the larger the GDP value, the higher the favorable degree of the exchange rate. At present, the content of inflation guidelines vary from country to country, but basically, prices are used as a benchmark, and then fine-tuned to their own national conditions to make reference to the guidelines. In this regard, the authorities will take into account the prevailing employment situation, sales figures, etc., as a reference for interest rate increase or decrease. Some developing countries, such as China, cannot tolerate such a "low" inflation rate because of their economic development needs. Of course, if the inflation figure is close to 0, it is very close to deflation, and below 0, it is deflationary. If inflation continues for a longer period of time, there will be a larger-scale recession. EmploymentSituation, including the unemployment rate and the number of people employed two parts) we generally attach great importance to the U.S. non-farm data, in fact, is part of the employment data many people take for granted that the increase in the number of people employed, there must be a decrease in the unemployment rate results in fact, this is completely wrong ... because of the different collection methods, destined to unemployment rate and Non-farm data will not go on the same path unemployment rate, is based on the U.S. Department of Labor reported unemployed and unemployment benefits to the overall employment rate, while new jobs (non-farm data) is the U.S. Department of Labor on the new positions of enterprises (such as job ads in the press), including all temporary positions (which will cause a specific environment, the phenomenon of a sharp increase in new jobs) For example, last Novembers U.S. election, when I predicted a surge in non-farm jobs, because during the election period, new temporary jobs for precinct workers were added, resulting in a record increase of more than 300,000 new jobs, and in December and April, for example, because it is the prime holiday spending period, temporary jobs will be increased greatly). On the other hand, as mentioned before, because of the unique environment of the United States, employment data, is also one of the factors of the Federal Reserve to determine interest rates, which is very important to non-farm jobs as a reference - we should understand why non-farm data is so important according to past experience, or some unwritten According to past experience, or some unwritten opinion, if non-farm jobs increase by 250,000 for three consecutive months, the Federal Reserve will raise interest rates, on the contrary, if negative growth for three consecutive months, the Federal Reserve will cut interest rates. Psychological" (Expectation), the other is the "shock effect" (ShockingEffect), the former will appear "Price-in" (early digestion) phenomenon, the latter will increase the price of the currency. The latter will increase the volatility and speed of the exchange rate in general, the monthly economic data, will be published one to two weeks in advance of the expected - these expectations, are major news agencies to economists or industry to do the results of the survey, the results may not be the same between the news agencies due to market share and survey methods, the market is currently the default Reuters Reuters (Reuters) expected median, as a reference for the forecast figures believe that we all know that to survive in the market, money, time and access to information, is what investors want, this common expectation, made some of what we call "early digestion" phenomenon is the question is, why not every The question is, why not every time before the release of data, the phenomenon of "early digestion"? This is because, 1, the focus of the market, 2, the order of importance of the data, 3, the market price at the time, whether because of the development of the previous and excessive value rise or fall, these are the impact of the data market, will not appear in advance of the phenomenon of digestion, for example, the first half of this year, the dollar rallied more than 11%, which contains the "early digestion "This is why the United States is almost certain to raise interest rates tomorrow, until today, the dollar still refuses to rise further reason on the other hand, as we all know, do foreign exchange, are not doing a single currency, we currently do the foreign exchange market, in fact, is called the "U.S. exchange", that is, the The major currencies are doing exchange transactions with the U.S. dollar (or the U.S. dollar as a reference for quotes), so when we want to look at the trend of the U.S. dollar, we also have to individually respond to the economic development of various currency countries, the economic performance in this market, will also affect the performance of the exchange rate when doing data quotes, we also have to pay attention to the possible early digestion of the phenomenon made by the "news into the market The development of the "news into the market, confirming the closing of positions" Many times, we will wonder why the apparently positive data, there will be a positive anti-phenomenon? The reason is that the markets expectation psychology has caused the phenomenon of "early digestion", while the actual data "market value" has been reflected in the current price level, and then, the market will start to close positions in response to the situation --On the other hand, the value of the data - the possible volatility brought by the data (this is probably my own creation) - is the value of the data. I may have invented it myself), what is it? Is it 100 points, is it 200 points, or is it 300 points? This depends on the degree of advance digestion on the other hand, if there is no obvious advance digestion phenomenon beforehand, the shock effect (ShockingEffect) will play an obvious role - the greater the difference between the real data and the expected value, the higher the shock effect! Here, there are two important questions: how do we determine whether there is an "early digestion effect", and how do we determine the value of the data? I will be in the next issue - the practical part of the corresponding answer to the impact of economic data on the market and corresponding methods (below) - the actual operation of the last issue I mentioned that the impact of economic data on the market, mainly economic data brought about by the market expectations and caused "The former will cause the actual market reaction will be contrary to the actual value of the data itself, while the latter will accelerate the speed of the current market How to observe whether there is In general, the phenomenon of "early digestion" is common when the market is rumored to have price movements (in the direction expected by the market), and when the news is confirmed, the market appears to "close out" (the opposite of the news when it is rumored). This is a lot of experienced investors know the truth and often encounter the phenomenon and this phenomenon, in fact, can also be substituted into the analysis of data quotes, and can form an analysis of skills usually, we will be one to two weeks beforehand to get the expected figures on the data, and when this time, we have to pay attention to the market after the emergence of the speech of the direction of price development here, to pay attention to two points First, we should pay attention to what the market is saying. Generally speaking, the market will show up a few days before the important data, and there will be a lot of talk about it, both good and bad. This of course involves our understanding of the data we need to be familiar with the most basic interpretation of economic data in advance, we want to do this, in fact, are very simple, I have already provided some of the most basic interpretation of economic data in the last issue, although not as good as the real textbook knowledge, but, for us to be familiar with the operation of the market, in fact, has been quite enough for the rest, just from our experience to confirm and improve the market Many people think that it is difficult to be familiar with economic knowledge, but personally, I think that if you have the will, you can do it, and the degree required is only the elementary school level - the difficulty lies in how you are facing the immediate Things? -The main thing is to confirm the importance of the data - this is important, when everyone is indifferent to the possible impact of the data, but also the clouds, we can easily lose our way to carry out this step, the next step is to actually observe the market price movement - - the focus is to confirm the market rhetoric in the market. -The focus is to confirm the direction of market talk, whether the market price will follow the direction of market expectations - for example, the market believes that a certain data positive dollar, we have to observe the price from then on, whether the development of the direction of market expectations, if the market price really to the direction of that If the market price really developed in that direction and went forward a distance (for example, more than 100 points, the price at the moment before the announcement of the data), we should be careful of the market may appear "early digestion" phenomenon When we found the "possible" early digestion phenomenon, the next step is "The next step is the application of the "psychological price" which will be discussed in the last section of the ShockingEffect. There is no certain ratio, or can be quantified, so it also needs to have the assistance of experience, and understanding of economic data in general, I personally for this contrast, there will be two aspects of comparison - first, with the previous historical data, if in the case of no sign, there is a record high or higher than the last growth First, when comparing with past historical data, if there is a record high or higher growth than the previous one without any sign (on the contrary, it is much lower or new low), or if the original expectation is much lower, but the result is good growth (on the contrary, it is expected to rise but there is an undesirable fall); second, there is a difference of double or more in terms of percentage ratio; these two factors will cause a shock effect, please remember that the formation of the shock effect is mainly due to a large gap with market expectations. How many points do you think a piece of data should be worth? I think, we may not think, if you think, but not necessarily quantified into a closer value personally, I believe we all know that I have a daily volatility of the usual statistics and research we can combine this research results organically with the data market? Yes, it is possible to do so, in fact, I am currently doing so friends who have more than ten years of experience in foreign exchange investment, should remember more than a decade ago, or even the early nineties or before, the United States and other major currencies of the countrys economic data, the market has an incomparably strong response to it - at any time an important data day But after a long period of market development, as well as the effective policies of governments, the current currency market, compared to ten years ago, has been much more stable, so it is now difficult to see more than 300 points of the market from this aspect, the "accidental" market in recent years, is very little, so In our calculation of the value of the data, we should first take the average daily volatility as a reference (you can also use the actual volatility statistics as a reference), and then when the data comes out before, we first count (observe) how much volatility is already on the day, to the minimum average volatility minus the existing volatility, to get the data after the possible development of the market space (assuming it is following a direction, of course, because of the "shock effect" and "sudden change"), if it is important data (such as the U.S. non-agricultural data and CPI, etc.), we will use the largest average volatility as the base of this kind of calculation, is to judge the data market, when The importance of this is that we will have a general impression of the possible development of the market space after the data, and even the actual price target When we have the initial calculation (to be completed before the data), then, we can respond to the market reaction after the data to make a decision whether to enter the market - If the data does comply with the markets expectations, and from the range calculation, if there is room for the results, we can enter the market to profit the opportunity to greatly increase However, we should know that the data will not always go along with the market expectations, so we must do a "reference point" artificially when the number comes psychological price level I believe you have seen me often mention the issue of psychological price, but you may not know what is going on in fact, this is a quite effective and simple practical application skills, generally have years of experience in the investment, will have this experience, only, the application of different names and carry on what I call psychological price, in fact, is the last price before the announcement of the data and carry on (such as the U.S. non-farm payrolls) The data release time is 20:30, we have to copy the last price before 20:30), not the calculated results usually, if the market after the release of data, there will be a forward process, we can regard it as almost or not the market expected conditions generated by the market, and this market, usually will be a straight line market (at least will continue for a period of time and distance) At this time, our "psychological level" will produce a role equivalent to "support" or "resistance" psychological level can be applied in two ways, one is as "The former is a reverse market, the latter is a forward market. In my case, I put more emphasis on the former - because if it is a forward market, the psychological level is not easy to reach or approach, unless the market is in doubt. Generally speaking, if the data market appears to develop in the opposite direction, due to the data release, there will be a large number of buying (or selling), they will use the "psychological level" as an important stop-loss position, if once the psychological level is broken, a large number of stop-loss emergence, you can imagine at this time, we can enter the field to do ultra-short Buy and sell - is for the stop-loss plate to come everyone should know that the large number of stop-loss plate, the price of further rapid development is certain so, when the market reverses the breakthrough of the psychological price level, we can follow the direction of the time, in the breakthrough of the psychological price level moment chase into buy or sell, because it is "fast market", holding time is basically within five minutes, up to 50 points of profit stop loss, we do this market, is not required to set a large stop loss, we usually take the days "psychological price" as a stop loss, when the market is not what we When the market is not what we expected, the price after entering the market and rebounded over the psychological price, we have to stop loss - this stop loss, usually within 20 points - unless your entry price is too bad - in fact In fact, we need to do this kind of market reaction and judgment, so the entry price is not too far from the psychological price, at most, only within 10 points, plus the stop loss, but also 10-20 points stop loss and carry on relatively speaking, in such a short period of time, the profit and loss ratio of 1-2 times, the value of the rate is very high about the data of the downward market, we have another approach this approach, there are two reference points, one is the psychological The first is the psychological price (i.e., the last bite before the announcement of the data), the second is the use of our 30-point turnaround confirmation method usually, if the data makes the market feel good or bad, when the data is announced, the price will deviate significantly and quickly from the psychological price, so, under normal circumstances, we are not easy to use the psychological price to do "homeopathic straight line market". Only when the market is still in the direction of the yo-yo doubt, there will be in the psychological level near the hovering back to the situation - because in the psychological level near, that is, at any time there is a chance to break the psychological level, so the risk is higher personal is not recommended to do so, only as a reference and carry on the second case, usually because the market appeared "In this case, the first thing we need to do is to calculate the "possible range" of the day in advance, my reference, from my own record of the database, the proposed The average volatility of the corresponding currency (I am using a five-day average, the purpose is to avoid the possibility of a single day of very large differences), and then according to the direction of the day, the first thing to do is to calculate the days possible target, for example, the day the low of the pound is 1.8100, the expected day is up, then add the average volatility of 200 points (just an example), the target price is 1.8300, if the price before the publication of the data is 1.8200, that is, if the data market is homeopathic, there are 100 points from the target - usually, if it is a straight-line market, may be a data release, the price has jumped a few dozen points, how to do? Then it is the turn of 30 points back to the application of the theory of everyone should have a preliminary understanding of the 30 points back to confirm, but we are not talking about how to confirm the high today, but how to use the 30 points to confirm the law to do the data market we all know that when the U.S. market opened after a period of impulsive market, back more than 30 points, the head or the bottom to be confirmed but we do data market is not to confirm the bottom, but In the aforementioned target has not been reached before, and data and the "Shocking" effect, we should pay attention to 30 points back to confirm the location, that is, the highest level at the time minus 30 points or low plus 30 points - if the market did not reach the target If the market does not reach the target, then each time the price level back within 30 points (i.e. before the confirmation level), we can try to buy or sell, with a stop loss beyond the 30-point confirmation level, the target is, of course, the range target calculated for the day - this is the minimum requirement of the practical example (1) - -August 31, 2005, the day the United States to announce the Midwest Chicago PMI (Purchasing Managers Index), the market expected 61.2, the previous month reached 63.2, we should understand that the market acceptance range, if it is plus or minus a few points, are normal and acceptable but, the day the PMI but unexpectedly fell a lot, reaching 49.2. The number itself is not a big problem, the problem is that the industrys definition is that when the value below 50 that means a recession, and above 50 represents the beginning of business expansion - as you can imagine, the value of the previous period is still showing the intention of business expansion "very high" But now all of a sudden, all companies are stopping, and they have to shrink or reduce their business? Can this be accepted at once? This is what caused the market to be "shocked" so, that day I have simply ignored the psychological price, but rather to pay attention to the duration of the straight line market results are very obvious, that night, in the United States before the market closed, the root. The original has not seen the turn back 30 points, but there have been about three turn back less than 30 points of the adjustment, and this adjustment, it is suitable for the previous 30 points back to confirm the practice of the law we can turn back each time not to 30 points before, into the European system to buy, and then out of the new high or in the price level to reach the results of the calculation range, and then decide to close the position practical example (2) - -September 2, 2005, the day is an important day for the release of non-farm payrolls data, the market in the two days before that day, there has been a cumulative increase of 400-600 points, the market has been generally expected to have the possibility of making adjustments results are, of course, also obvious, the actual non-farm payrolls figures, although worse than the market expected, but, however, not as the day before the Chicago PMI "outrageous", the result is that the market rushed a short period, about 20 points after the turn back and reverse the "psychological level" (20:30 price), the result is predictable, I will be in the pound after the psychological level, chase in and sell short twice --basically because of the psychological price to come - the first is five minutes to close the position, only a small profit, the second because he rallied enough to judge will continue to have a new low, so then sell, also earned of course, and then the European market after the closing of the pound independent upward, it is not In the scope of todays discussion of the above range calculation and 30 points back theory, please refer to my personal "DTS Introduction" and past investor diary comments
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