Trader Tip: Reports and more Reports As traders one important task to start the trading day is to ensure we review the scheduled reports of the day. We do not want to be surprised when an important report comes out, with a massive jump in price, and we have no idea when and why this happens. One such report is the GDP (Gross Domestic Product), as we know from previous Trader Tips, a very important number that determines the value of fiat currencies we trade. One problem is, that there are so many of these GDP reports that come out. How does one know which is the one that markets will get triggered on? In this Trader Tip, we shall discuss this point.
Though there are other private organizations that provide their own view, for the US GDP report, the BEA (US Bureau of Economic Analysis) provides three GDP views per quarter (click here for the schedule – sort on “Gross Domestic Product”). Here they are as follows:
- Advance – 3.5 weeks after the quarter finishes.
- Preliminary – 8 weeks after the quarter finishes.
- Final – 12 weeks after the quarter finishes.
Basically each progressive report provides greater accuracy on the GDP number, as better/more complete data becomes available. So which one does the market focus on the most? The answer is, it depends. In general, I find that the Advanced is the report that most moves the market, though if the following updated reports are significantly different from the prior report and/or significantly divergent from estimates, these reports too can move the markets.
When looking at the BEA’s own analysis (see attached chart) we can see that the variances of the different releases of the GDP reports historically, are very often not far from the previous report (click here for a more detailed analysis of this point). This may seem like a minor Trader Tip, but the more you understand the workings of the markets and the scheduled reports and subsequent analysis of them that drives markets, the more successful we can become as traders.
Learn more on this, review of the news headlines, technical analysis and more on your daily YouTube Blue Point Trading Morning Call. Click here, or watch below this Trader Tip in video format.
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