In our last lesson we began a discussion on the different components that make up the US Economy and how these relate to trading with a look at the Natural Resources and Labor Force components. In today’s lesson we continue this discussion with a look at the Private Sector and Government components and how each of these relates to trading.
While having lots of natural resources and a large well educated labor force to produce goods and services from those natural resources is a great thing, without a way to organize these first two components of the economy, not much would get done. This is where the small, medium, and large businesses which make up the private sector come in. In addition to organizing the labor force to produce goods and services, the private sector is also responsible for raising the capital necessary to bring all these things together which they do through private investors, loans from commercial banks, the bond market, and/or the equities market.
While many people think that the US Economy is dominated by the large corporations, it may come as a surprise the large role that the small business play’s in the US Economy. According to the US Department of State:
"Of the nearly 26 million firms in the United States, most are very small—97.5 percent ... have fewer than 20 employees," the U.S. Small Business Administration says. "Yet cumulatively, these firms account for half of our nonfarm real gross domestic product, and they have generated 60 to 80 percent of the net new jobs over the past decade."
While we will go into more details about the private sector and how this all relates to trading in later lessons, it should be obvious at this point the large effect that the private sector has on all markets as they are the ones who: 1. Raise capital through bonds and stocks that we then trade, 2. produce the goods and services which drive demand for the commodities we trade and 3. Affect the foreign Exchange markets by playing a role in what goods and services are produced domestically, which we import from overseas, as well as cross boarder mergers and acquisitions.
The fourth component that I am going to discuss here is the role that government plays in the US Economy. There are several important roles that the government plays in the economy which can drastically affect the markets one of the more prominent of which is that of Regulator. There are many parts of the US Economy that the government regulates with some of the more prominent areas being:
Anti Trust Laws: These laws are in place to protect the consumer from businesses that grow so large that there are no other businesses that can compete with them, basically allowing those businesses to set unfair prices due to the lack of free market competition.
Environmental Laws: These laws are in place to protect the environment by establishing maximum levels of pollution that businesses are allowed to produce and then checking to make sure that these levels are not breached through agencies such as the Environmental Protection Agency.
Securities Regulators: The government is in charge of monitoring and regulating many parts of the financial system through agencies such as the Securities Exchange Commission and the Commodities Futures Trading Commission.
The primary way in which the role that government plays in the regulation of the economy affects us as traders is through how increases in regulation and decreases in regulation are taken by the market. In general anything that makes it easier to do business which normally means less regulation is going to be seen as positive for the market and anything that makes it harder to do business which is normally associated with more regulation is going to be seen as negative for the economy.
That’s our lesson for today. In tomorrow’s lesson we are going to continue our discussion on the role that government plays in the economy and how this relates to trading with a discussion on Fiscal Policy or how government spending and taxes affect the markets so I hope to see you in that lesson.
Actionable trading levels delivered to YOUR charts in real-time.
Wed 30 Jan 2019 A 12:15 US- ADP Payrolls A 15:00 US- EIA Crude A 14:00 US- Fed Decision Thu 31 Jan 2019 A 07:00 DE- Retail Sales A 08:55 DE- Employment A 10:00 EZ- GDP A 10:00 EZ- Flash HICP A 12:30 US- Weekly Jobless A 15:00 US- Personal Income/PCE Fri 1 Fed 2019 A all day Flash PMIs AA 08:30 US- Employment A 10:00 EZ- GDP
Mon 4 Feb 2019 A 09:30 GB- Construction PMI Tue 5 Feb 2019 A all day Service PMIs A 04:30 AU- Reserve Bank Of Australia Wed 6 Feb 2019 A 16:00 US- EIA Crude Thu 7 Feb 2019 A 12:00 GB- BOE Decision A 13:30 US- Weekly Jobless Fri 8 Feb 2019 A 13:30 CA- Employment
Global-View Affiliate Program
We are starting an affiliate program to market some of our products.
Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.
Put the word "affiliate" in the email subject line.
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.