During the course of every month, there is data released from various sources (primarily the government) that reflects the state of the economy. There are also inventory numbers in certain commodities, and on the months when the Federal Open Market Committee (also known as FOMC) meet, their decision on monetary policy is widely watched by market participants. In addition, over the last twelve months or so, news coming from the European Central Bank has enormously impacted the markets here in the US.
Traders should have as part of their daily routine a calendar check early every morning before they begin their trading day. Having this information and actual time of the releases enables a trader to make the necessary preparations if she elects to be in the market at the time of the release. There’s always the option to stay out of the market all together when the data hits the news wires, which is what novice traders should consider.
When it comes to data being disseminated, the general consensus is that good news is to be bought and bad news is to be sold. This thought process is what leads the general public (more often than not) to hand over their hard-earned money to the institutions, the… Continue Reading
