Posts Tagged ‘indicators’

Understanding the Fundamentals – Unemployment Rate

Friday, September 28th, 2012
Understanding The Fundamentals –  Unemployment rate
Unemployment rate is the percentage of the labor force who doesn’t have a job but are willing and actively seeking work. It is one of the macroeconomic indicators that most fundamental analyst are observing in case of a long term investment decision and is usually published at 8:30 EST (NY) on the 1st Friday of the  month.
The unemployment rate is calculated by dividing the number of unemployed individuals by all individuals currently in the labor force.
Effects of Unemployment in the Society and Economy:
Counter-productiveness
Instead of spending their time, effort, and resources in performing a job, the unemployed part of the labor force are obligated to drain their efforts first in seeking out  new jobs. The individual’s counter-productiveness may even worsen if the hunt will turn out to be a failed attempt.
Impoverishment leading to social unrest
Idle individuals have lesser financial means to dispose thus allocating most of it only on the “needs” in order to survive. In the the long run, this may result to dissatisfaction which may escalate once certain individuals started to fill-in their “wants” through dishonest means. The dishonest means which is used to gratify the “wants” may then lead to unrest in the public.
Exploitation of labor
Since there is a surplus of workers because everyone is seeking out a job, there is a high tendency that laborers will be exploited. Most company will take an advantage on this situation since laborers are forced to accept what is offered to them because of fear to lose their job. The exploitation may be in different forms like lower wages, fewer to none benefits, unpaid overtime pay, longer working hours, etc.
Less People Pay Taxes
An individual without any source of income cannot pay his dues to the government. Only those that are employed have the capability to pay the taxes and no tax is certainly a “no no” to the government. Without taxes, the economic activity will slow down because taxes is like a fuel that keeps the economy running.
Bankruptcy of Businesses
Unemployed individuals spends only for things that they needed to survive. The decrease of purchasing activity of consumers will certainly cut those companies that manufactures products that are not essential in the day-to-day activities of individuals.

Unemployment rate is the percentage of the labor force who doesn’t have a job but are willing and actively seeking work. It is one of the macroeconomic indicators that most fundamental analyst are observing in case of a long term investment decision and is usually published at 8:30 EST (NY) on the 1st Friday of the  month.

The unemployment rate is calculated by dividing the number of unemployed individuals by all individuals currently in the labor force.

Effects of Unemployment in the Society and Economy:

Counter-productiveness

Instead of spending their time, effort, and resources in performing a job, the unemployed part of the labor force are obligated to drain their efforts first in seeking out  new jobs. The individual’s counter-productiveness may even worsen if the hunt will turn out to be a failed attempt.

Impoverishment leading to social unrest

Idle individuals have lesser financial means to dispose thus allocating most of it only on the “needs” in order to survive. In the the long run, this may result to dissatisfaction which may escalate once certain individuals started to fill-in their “wants” through dishonest means. The dishonest means which is used to gratify the “wants” may then lead to unrest in the public.

Exploitation of labor

Since there is a surplus of workers because everyone is seeking out a job, there is a high tendency that laborers will be exploited. Most company will take an advantage on this situation since laborers are forced to accept what is offered to them because of fear to lose their job. The exploitation may be in different forms like lower wages, fewer to none benefits, unpaid overtime pay, longer working hours, etc.

Less People Pay Taxes

An individual without any source of income cannot pay his dues to the government. Only those that are employed have the capability to pay the taxes and no tax is certainly a “no no” to the government. Without taxes, the economic activity will slow down because taxes is like a fuel that keeps the economy running.

Bankruptcy of Businesses

Unemployed individuals spends only for things that they needed to survive. The decrease of purchasing activity of consumers will certainly cut those companies that manufactures products that are not essential in the day-to-day activities of individuals.

Stephen Stevenson

Economics 101 – Import and Export

Friday, August 31st, 2012
Different goods and services are bought and sold by different countries all over the world. The products and services that are produced outside the country brought inside a country are called Import. Furthermore, the products and services produced inside a country and shipped outside a country are called Export.
Import transactions are done through a non-resident selling the goods to a resident which will then forward it to the locals. For example, a foreigner will sells a basket of apple to a local which will in turn sell it to local market. Meanwhile, Export transactions are done when a local sells goods and services to a foreigner. The rate of import and export affects the growth of a country’s economy.
In the Fundamental analysis, those macroeconomic indicators are regarded as the Import and Export prices. Import and Export prices are released on the 10th day of every month at 8:30 EST (NY) which will have an impact  on the key growth expectation. If there’s a increase in the export then the US dollar rate will  increase. But if the import increases then the rate will decrease.
Moreover, It is attributed to the income and expense of a country. If the income surpasses the expense then a surplus may arise. But if the expense outweighs the income then a deficit will probably occur.
Though Import and Export prices only has a little influence on the market, it is needed for a long term economic analysis. Traders that are trading in long positions in Forex may need to regard this index.

Different goods and services are bought and sold by different countries all over the world. The products and services that are produced outside the country brought inside a country are called Import. Furthermore, the products and services produced inside a country and shipped outside a country are called Export.

Import transactions are done through a non-resident selling the goods to a resident which will then forward it to the locals. For example, a foreigner will sells a basket of apple to a local which will in turn sell it to local market. Meanwhile, Export transactions are done when a local sells goods and services to a foreigner. The rate of import and export affects the growth of a country’s economy.

In the Fundamental analysis, those macroeconomic indicators are regarded as the Import and Export prices. Import and Export prices are released on the 10th day of every month at 8:30 EST (NY) which will have an impact on the key growth expectation. If there’s a increase in the export then the US dollar rate will increase. But if the import increases then the rate will decrease.

Moreover, It is attributed to the income and expense of a country. If the income surpasses the expense then a surplus may arise. But if the expense outweighs the income then a deficit will probably occur.

Though Import and Export prices only has a little influence on the market, it is needed for a long term economic analysis. Traders that are trading in long positions in Forex may need to regard this index.

Stephen Stevenson

Cynthia Kase

Wednesday, February 23rd, 2011

Further to our topic dedicated to successful women traders we would like to present the story of Cynthia Kase.

Cynthia Kase got acquainted with trading in August 1983 when she had to undergo a training program in the trading department of the company she was working in. It happened the same year when a contract for crude oil became available. Cynthia persuaded the company to install a compute in the trading room. Cynthia was experienced in computer technologies due to her technical education.

The first and the most important thing about trading realized by Cynthia was that in order to succeed on the market on should act separately from the crowd. Cynthia said several times: “You cannot listen to everybody. I think it is important to be focused, have enough sleep, stay calm and everything will fall into place. It is wrong to always be worried.”

At the moment Kase considers herself an absolutely technical trader, despite the fact that she has been a technical trader since 1985. Further Cynthia Kase starts to develop her own technical indicators that she offers to her clients. At present she is trading for herself and consulting about thirty corporate clients. Kase has developed and indicator – PeakOscilltor – that can use cross-comparison of markets and Dev-Stop – a technology of setting stop orders in accordance with market volatility. Kase has published three articles in Futures Magazine, where she described the technical indicators in details.

Since the first day on the market Kase has not employed intraday trading. Her average deal lasts for 3-10 days. Cynthia Kase prefers energy markets, at the same time she highlights that her technical indicators are suitable for all markets. She also favours physical futures over financial ones, since futures depend on unconditioned and political factors.

Besides, Cynthia Kase says that “There are three most important things. First, you should not listen to someone else’s advice. Second, there is no easy way. You cannot find the Holy Grail. Diligent work and persistence make a successful trader. And third, this should bring pleasure.”

Added by Alexandr Petryanin,
InstaForex Clients’ relationship manager

New trading platform MetaTrader 5 by MetaQuotes Software Corporation

Thursday, October 21st, 2010

The long-expected new trading platform MetaTrader 5 by software developer MetaQuotes Software Corporation was officially released on 1st June 2010. It has a set of impressive advantages both over the previous MetaTrader4 and other trading terminals.

Now there is a single position for total result of each currency pair, which makes trading more convenient. Moreover, abolition of position locking minimizes trader’s expenses for entering and exiting the market. Also the terminal now supports 4 types of order execution: Market, Instant, Request and Exchange. Aside from the market orders Buy and Sell, 6 types of pending orders are supported: Buy Limit, Buy Stop, Sell Limit, Sell Stop, Buy Stop Limit and Sell Stop Limit.

Another useful novelty is that quotation history in MetaTrader 5 terminal is stored in the minute timeframe (M1) only, and all charts are constructed on its basis. Such a concept allowed increasing the number of timeframes up to 21, so any period is available for quotation analysis: from minute to month timeframe. The way of historical data storage in MetaTrader 5 terminal is also highly economical.

Another important advantage of the new platform is the implementation of new development environment – object oriented programming language MQL5. It includes MetaEditor 5, MetaTrader 5 Strategy Tester, MetaQuotes Language 5 (MQL5) and client terminal MetaTrader 5 where expert advisors are executed. MQL5 has a very high speed of execution and is very close to C++ language in that parameter. For comparison, new language is 4-20 times faster than MQL4. High speed makes the development of even the most complex expert advisors easier and faster. MetaTrader 5 Strategy Tester is the most powerful instrument for any expert advisors developer. With it you can acquire expert advisor work results based on history before using it in real trading. Detailed reports on trading system allow traders to test expert advisors, detect their weaknesses, and compare them with other similar products.

Added by Tatyana Makhina,
InstaForex Clients’ relationship manager

Indicators: types and application on Forex

Wednesday, August 25th, 2010

In order to make profit on the international foreign exchange market, a trader needs to constantly monitor price movements, in accordance with which he decides whether to buy or sell the currency. Various indicators are of great help in defining price fluctuations.

Indicators are graphically represented mathematical formulae, based on the data about price fluctuations and trade volume changes. They are aimed at showing the current price movement, signaling the price hitting significant levels and, under certain conditions, specifying these areas. There is no 100% accurate indicator though.

Many indicators have been offered for now. You can download and test them for free and thus select the one which would suit your trading style best. The indicators differ in the methods of price analysis.

The base is constituted of a certain period of time and price dynamics within the period. The analysis is carried out with application of several absolute and temporary parameters. The figures are then compared to price values – maximum, minimum, average ones – to traders’ activity on the market and many other market factors. The result received is a definite rate of the expected price movement, to which a trader is targeted. The value is demonstrated on charts as a combination of multicolor zones, lines and points. This is what most indicators look like.

Traders often tend to use several indicators in their work. There are 3 major groups of indicators:

  1. Trend indicators, showing price movements; defining the current and expected trend simultaneously or with a little lag;
  2. Oscillators, depicting the prolongation or change of the trend in advance or synchronically;
  3. Psychological indicators, which determine the sentiment of the market participants.

The indicators’ diagrams can be either extracted to a separate window or integrated into the price chart in MT4 terminal. You can use several indicators at the same time to make more accurate forecasts of further price movement.

At present, MT4 trading platform offers a wide range of integrated indicators.

Added by Tatyana Makhina,
InstaForex Clients’ relationship manager