For the general trading investors making use of the fundamental trading strategies, it is very essential to have a good grasp of what each report means in order to have an idea of how the current market will react once the new results are released in comparison to their respective positions.
One of the most commonly monitored economic releases is the Retail Sales report, which gives a good number of investors a good indication of the way a domestic economy is working as well as the level of capability each individual consumers are able to show with respect to their spending budgets.
Moreover, signs of weakness in these numbers will provide for a major cause of concern for investors who are looking to purchase the country’s currency and this will often result in a downside pressure one investors begin to establish new positions. On the contrary, the signs of strength will most likely entice investors who are looking for a stable domestic economy with strong consumer spending habits.
Yearly versus monthly data
Retail Sales are basically evaluated on a monthly and yearly basis and are released by the government of each country. This can be very difficult for some traders to comprehend but in reality it is generally very easy. Monthly retail sales figures to the retail sales performance of the prior month is the shorter term figure in these reports but this is normally given a higher level of importance since it allows traders to have a superior option of how to come about the economy in its performance.
In the contrary, the yearly figures show that the most recent data in relation to longer term time frames means that the data from the latest month is being compared to the ones from the same month in the prior year. This data is generally viewed as being extremely less important mainly because in the forex market, the positions are not well grounded in this period of time.
Being conscious of the monthly schedule for retail sales figures
The retail sales report is routinely scheduled each month in order for traders to know in advance when a subsequent increase in market volatility can be anticipated. Normally, the results of these two distinct time frames will position with each other so that the monthly and yearly figures will often show a decrease, a rise or a stagnant combination with each other. There will, however, be cases wherein despite the data not agreeing with each of the time frame, there is still a rise in the monthly figures following a decline in the yearly figures which is generally unremarkable.
In these cases, the monthly data will normally be of more significance but the fact that the numbers do not completely show an agreeable indicator is a sign that there is an impending change that would either be affecting the present currency prices. Furthermore, this basically means that the trading strategies are likely to have a much better chance of success that other novel trading strategies. For this very reason, it is vital be very cautious of the data results before actually putting all efforts to a new position approach.