Why indicators of indices and data reports can affect the stock prices?


The world market for the average person seems incredibly large world where it sometimes seems difficult to understanding. But you don’t immediately succumb to such prejudices with regards of what not yet even has imagined. Even ordinary people know that trading laws are simple – “buy low and sell high” and “know to step aside.” But at the same time, a significant amount of data, reports, and indices can scare the concerned person, who wants to earn more than salary. The team of financial analysts and traders of the Trade-24 company decided to tell you about how the different indicators and indices data reports can affect the status and cost position of shares in the companies.

The Algorithm of Decision

Our analysts note that for the proper implementation of the strategy, which we mentioned at the beginning of our material, an important factor for successful implementation will be the formation of its set of rules that will help successfully to earn in the financial markets. This algorithm is correct trade consists of 4 important points: the selection of working tools, knowledge of the relevant trading data, sticking to the rules of risk management and the development of valuable recommendations.

Selecting the right direction

According to the observations of our traders, many participants adhere to a rather conservative trading strategy. Most often, this trade is called “a signal” or “traditional,” the essence of which is that the client reacts upon an occurrence of commerce movement. However, there are also more dangerous players who are not afraid to invest much more extraordinary that specifically. On this basis, large traders, knowing the behavior of inexperienced players can provoke speculative buying and selling, even begin to panic and drop a fantastic trade value of the instrument.

In such cases, the majority of professional traders are advised to create “investment portfolio.” Simply put, any dealer to collect sufficient funds (more detail about what the rules of successful traders should adhere to – read here), as well as a significant selection of enough information on the impact on the upcoming trading instrument performance. At the same time, it is important to know what will be the market’s reaction to the events, and that – could trigger its motion.

In addition to the portfolio, you should always have a few trading tools for the market, and – on the basis of their need/market demands – the use of financial analysts’ advice, once again we note the impact of the foundations of risk management. It often happens that for some reason the trader loses sight of its ratio of profitable and unprofitable operations. It is through the study of the risks; you can not only avoid the profits but also help restore its position in the trading tools.

How to respond to market changes: Traders Tips

It is enough to know what tools are present in the trade, financial analysts at Trade-24 ready to tell a few “secrets” of the market on how to respond to the market worth. For an explanation of the apparent complexity, we chose two trading tool in any order. Therefore, we turn to the example of the currency pair EUR / USD and the dollar index.

Tip 1. Commit monitor major news market

%d0%bf%d1%80%d0%b8%d0%bd%d1%8f%d1%82%d0%b8%d0%b5-%d1%83%d0%bf%d1%80%d0%b0%d0%b2%d0%bb%d0%b5%d0%bd%d1%87%d0%b5%d1%81%d0%ba%d0%b8%d1%85-%d1%80%d0%b5%d1%88%d0%b5%d0%bd%d0%b8%d0%b9From this point, the trader should observe the changes of key indicators and data, which are “financial triggers” of the market. For example, when the output of the report on monetary and credit policy of the ECB and the Federal Reserve, the emerging trend will depend on the pressure will be committed to a focus. Also, the revision of rates above will reduce the strength of one currency and raise the position of the other in the back proportionally. If data are the performance “better than expected,” “in line with expectations” and “worse than expected” for some additional reports, these indicators allow traders to understand faster, which can lose its value.

Tip 2: Check the operation of the trend indicators with reports and important news

The presence of certain expectations regarding data reports and important news with high volatility is always to make pressure on some signs and the value of the shares of leading companies, which are connecting with the market. Already mentioned earlier the US dollar index may lose or raise position in the forex market if there are favorable conditions for such data.

107608-640x320For example, at a particular time will be issued a report on the index of unemployment in the US, which is before the publication of the report has a figure of 4.5%, while analysts forecast to put up 5%. Now let’s imagine that the released information was better than expected – the unemployment rate was 4.1%, in line with expectations figure was at 4.7% and worse than expected – by 5.2%.

In other words, if the figure is 4.1%, which means an increase in the budget because of the demands of enterprises on the dates of specialized staff, and will give the inflow of tax funds to the state treasury, which will increase the performance of the US dollar index. In the case of “in line with expectation” or “worse than expected” – it does not bring revenue and will provoke the fall of the currency.

Tip 3. Specify and reduce all the data on your instrument

In the conduct of bidding and the opening/closing of the accounts, our team of analysts and traders pay attention to what you need to do motion estimation for a period the trade, given all the news and data. Such tactics will adequately present the likely trend of the market in the short and medium term.

Lastly, summarizing all the written above, Trade-24 team of analysts the company draws attention to the fact that the trade “on tap” does not always produce the desired success. In our opinion, it is adhering to the above advice and guidance, and the trader can expect to receive the expected profits or any other where successful proposals for their development as a market participant.


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