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Asked a question 2 years ago

Is it worth tracking Economic Indicators as a day trader?

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For a day trader, it is better not to allow all these economic indicators and news to mess up your mind.

Good results get published , the stock price falls.

Market opens big gap down because of bad economic indicators, but closes in green.

Corona Virus Surge, but Market goes up.

Interest rates goes up, and market falls, the same interest rate goes down the next year but the market still falls.

When the country publishes a good gdp outlook for this year, the same evening rating agencies comes out with a dim gdp outlook for next year.

Now, where is the space for a daytrader to even meaningfully interpret these indicators in a matter of 6 hours, when each time the market reacts differently to the same indicator?


Interesting takes from both @Suruchi Kapoor19 and @George Roper20 

Here are my two cents. You may or may not trade based on economic data, but you need to be aware of them, especially if you intend on having a position when the data is released. This is especially true in case of commodities and currencies, which tend to be quite sensitive to economic releases. Having an intraday/short-term position and not being aware that an important data would be coming up could lead to trading losses (if you fortunate enough, can lead to gains as well).

As an example, the US employment data is released on the first Friday of every month. This is one of the most widely sought economic data as it tells about the health of the labor sector of the world's largest economy and has a bearing on the Federal Reserve's monetary policy as well. Hence, commodities tend to be quite sensitive to this data. This is especially true in case of precious metals. If you see the historical charts of gold and silver, you will see that they tend to be quite volatile as the data is released. Hence, if you are trading gold and silver, you need to be aware of this. In a similar fashion, there are many other economic releases that impact movements in commodities and currencies. If you trade these assets, you need to be aware of when these data come out.

In case of equities, domestic inflation, trade balance, industrial production, GDP etc. are some of the data that impact the Indian markets. However, the impact tends to be less severe, unless there is a significant deviation from forecast.

Another thing, not all data impact each instrument in the same way. You need to be aware of which data will impact which instrument and the sort of impact. For instance, the US GDP is likely to have an impact on gold but is unlikely to have much of an impact on, say, wheat or Reliance Industries.

 It depends from trader to trader. Iam a day trader and for me economic indicators plays an important role. 

Most of the time I have noticed that day traders are not at all aware that on which particular date or day economic data is going to get released, as a result they take trades in markets and stocks and, when data comes they make huge losses because of the volatility which they face in the markets and stocks because of the economic data. 

I can understand not everyone have a liking for economic indicators and data because of the complexity involved in it, however with my personal experience I suggest that at least as a day trader one should be aware on which date or day  economic data is going to come, this will help you from taking random trades.  Besides, this as a day trader if you understand the impact of the economic indicators and their impact on markets and stocks then you can build your intraday strategy on stock and market in a proper manner and can avoid unnecessary losses.

You can track all the important economic data on our Fyers app. For better understanding you can click on the below mentioned links. Happy Trading! Be Safe. :-)




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