ECONOMIC BASICS                                                Click Here to read in Vietnamese

Attention: To protect your investment, my best advise to you is to follow your own instinct about the pair you are about to trade. In reality, no one knows for sure why the market prices changed the way it had been, therefore, there're no absolute answer for the prices to change in the future. The information provides below is able to help you to make decision prior to trade. These information are merely a brief subsequence in analyze of which area of economic news you should follow at the purpose to predict the change in market price. However, applying solely based on these information will not guarantee an expected result as the nature of international currency prices are constantly change every minute worldwide. To profit in currency trade, you need to practice. Experience from practices will enhance your instinct, once this instinct gave you good result -- Stay with that instinct!

The basics analyzing based on economic are the information you are receiving daily through media outlet, these media outlets can be those agencies of one's government or private sector. These information commonly known as news, these news are follow precisely by almost everyone who worked in financial market and all trade investors. The best sources of information about U.S. economic can be viewed at www.ny.frb.org, within this site, you will search for 'economic indicators'. The information provided in the economic indicators are the most accurate statistics that had happened in the past. Based on these past economic performances, one can inherit a pattern of price movements and apply to a trade for self profit. The most common economic indicators that was utilized by many investors are as follows:

The Gross Domestic Product (GPD): The sum of all goods and services produced either by domestic or foreign companies. GDP indicates the pace at which a country's economy is growing (or shrinking) and is considered the broadest indicator of economic output and growth.

Industrial Production: It is a chain-weighted measure of the change in the production of the nation's factories, mines and utilities as well as a measure of their industrial capacity and of how many available resources among factories, utilities and mines are being used (commonly known as capacity utilization). The manufacturing sector accounts for one-quarter of the economy. The capacity utilization rate provides an estimate of how much factory capacity is in use.

Purchasing Managers Index (PMI) - The National Association of Purchasing Managers (NAPM), now called the Institute for Supply Management, releases a monthly composite index of national manufacturing conditions, constructed from data on new orders, production, supplier delivery times, backlogs, inventories, prices, employment, export orders, and import orders. It is divided into manufacturing and non-manufacturing sub-indices.

Producer Price Index (PPI) - The Producer Price Index (PPI) is a measure of price changes in the manufacturing sector. It measures average changes in selling prices received by domestic producers in the manufacturing, mining, agriculture, and electric utility industries for their output. The PPIs most often used for economic analysis are those for finished goods, intermediate goods, and crude goods.

Consumer Price Index (CPI) - The Consumer Price Index (CPI) is a measure of the average price level paid by urban consumers (80% of population) for a fixed basket of goods and services. It reports price changes in over 200 categories. The CPI also includes various user fees and taxes directly associated with the prices of specific goods and services.

Durable Goods - Durable Goods Orders measures new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. A durable good is defined as a good that lasts an extended period of time (over three years) during which its services are extended.

Employment Cost Index (ECI) - Payroll employment is a measure of the number of jobs in more than 500 industries in all states and 255 metropolitan areas. The employment estimates are based on a survey of larger businesses and counts the number of paid employees working part-time or full-time in the nation's business and government establishments.

Retail Sales - The retail sales report is a measure of the total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation. It is the timeliest indicator of broad consumer spending patterns and is adjusted for normal seasonal variation, holidays, and trading-day differences. Retail sales include durable and nondurable merchandise sold, and services and excise taxes incidental to the sale of merchandise. Excluded are sales taxes collected directly from the customer.

Housing Starts - The Housing Starts report measures the number of residential units on which construction is begun each month. A start in construction is defined as the beginning of excavation of the foundation for the building and is comprised primarily of residential housing. Housing is very interest rate sensitive and is one of the first sectors to react to changes in interest rates. Significant reaction of start/permits to changing interest rates signals interest rates are nearing trough or peak. To analyze, focus on the percentage change in levels from the previous month. Report is released around the middle of the following month.                         Next Subject: Chart Analysis.