Do You Make This Trading Mistake?
One huge mistake I see traders make all the time, is not realizing when economic numbers are coming out. In other words, economic releases by the federal government or some other federal agency during the trading day.
The reason this is a mistake is because the markets very often will have a severe knee-jerk reaction to some economic release. And if you’re day trading a stock, or you’re day trading futures, or even Forex, you can have some pretty wild rides that sometimes only last a few minutes.
So you should really always know when economic releases are coming out. Here are some of the best places to find them. I recommend you save these as favorite places.
So the first one I want to point you to is Benzinga. I really like this tool. So if you just go to Google and type in benzinga economic calendar, click that first link that comes up, and you can save this as a favorite place.
So when you first get to this site, the smartest thing to do is just click on Show Filters. Now this is for me, I’m in the United States, I only follow the United States markets. I’m less concerned with the overseas markets. Click on USA. And then click Filter Results. This way it’ll just filter the results that are here in the United States.
Now, the thing I find really neat about this site, you can look at level of importance… which release has the most level of importance and is most likely going to influence the stock market or whatever market you’re following.
So here are the different releases for today, March 24th, 2020. We see we have the Red Book coming out, Month-over-Month, Year-over-Year, Manufacturing PMI, Market Composite PMI. So this one is fairly important, has like a 50% importance rating. It came in at 49.2, the forecast was 42.8, so it could have been, or it could be, a bullish number.
We see at 10 o’clock we just had New Home Sales today. They came out at 765,000. Look how the market regards this as a very important number, and the forecast was 750. So it came in better than expected.
Now all things being equal, the market is in a normalized time where we’re in perhaps an uptrend or a choppy period, not in a significant market correction like we are today, March 24th, 2020. We’re in the middle of the Coronavirus sell-off, possible rebound today. But during normalized times, a New Home Sales number of 765 versus a forecast of 750 could bump the market up a bit.
So that’s why it’s important to know, if you’re long stocks at 10 o’clock, if this number would have come in very weak, that could take the market down. So you should really know when these numbers are coming out so that you can protect yourself with stop loss orders.
Just be really, really careful when these numbers come out so that you can protect yourself and not get blindsided while you’re trading.
Let’s look at tomorrow. In fact, let’s look at this week. So I’ll pull up this week. We’re still on USA, past Tuesday. So now I can see the whole week at a glance.
So we have the Core Durable Goods Orders tomorrow, Wednesday. So that’s something to look out for that’s at 8:30. So futures traders need to keep an eye on that. That’s before the stock market opens.
Crude Oil Inventories… This is a very important number, no matter what’s happening in the world, because this will show if inventories are building or if inventories are being drawn down.
And being that oil is at such a low price, the lowest we’ve seen in like 10 years or more, if there’s any buildup of inventory, that could force prices even lower, which would be kind of bad for the economy and oil workers.
So these are the kinds of things you need to keep an eye on as a trader. The GDP is an important number.
So this is a great place to find an economic calendar: benzinga.com/calendar/economics.
So you might want to save that as a favorite.
So to recap real fast, not knowing when economic releases come out can be a fatal error if you’re a day trader or a swing trader of just about every market.
It’s important to know when they’re coming out because when they do, you sometimes see crazy knee-jerk reactions in prices.
Many times they don’t last more than a few minutes, but you can get whipsawed out of a stock or stopped out of a position, only to watch the move you thought was going to happen resume, and that can be extremely frustrating.
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My name’s Eddie Z. Thanks for watching, and I’ll see you in the next video.