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Economic growth of countries can also have a big impact on the overall currency market sentiment besides the interest rates. United States is the largest economy in the world. US economy is the key factor in determining the global currency market sentiment. US economic growth figures affect the major currency pairs like EUR/USD, GBP/USD, CHF/USD and JPY/USD.

A strong economic expansion coupled with a healthy labor market tends to boost consumer spending in the country. This helps in selling the stuff produced by the local companies and businesses.

A country with a strong economy is in a better position to attract foreign investors. Foreign investment flowing into the country increases the demand for that currency. This increased demand causes that currency to appreciate against other currencies.

Some of the most important indicators of a country economic growth are: 1) Gross Domestic Product, 2) The unemployment rate and 3) The trade balance. Lets discuss these three economic indicators.

GDP: GDP measures the total good and services that are produced in a particular country in a one year. A healthy GDP growth rate figure usually adds a bullish sentiment to the currency of that country especially if it exceeds the market expectations. Always remember the markets tend to react more to surprises. The reaction can be positive or negative depending on the surprise. Actually we will be usually talking about the GDP growth rate whether the economy is expanding or contracting.

Unemployment Rate: A low unemployment rate is considered to be a positive for the countrys economy and its currency. The unemployment rate data reports the state of the labor market in the country. A low unemployment rate means almost all the consumers have jobs and they are willing to spend more. The more the consumer spends, the more the companies and businesses in the country sell. This generates more output and further expands the economy. The opposite is true for a high unemployment rate. High unemployment means the economy is in recession.

Trade Balance: Current account balance is very important for measuring the health of a particular economy. If a country exports more than it imports, the trade balance is in surplus. If the imports are more than the exports, the country will end up with a trade deficit. Trade Balance is the net exports in short. This is another widely watched economic indicator in fundamental analysis. Current account deficit must be balanced by the capital account surplus otherwise a balance of payment problem will ensue. Trade deficits are not good.

For example, suppose US import more from Europe. USD will have to be sold in order to buy Euros to pay for those imports. This will result in the depreciation of USD relative to the Euro and other currencies. The opposite is true in case of a trade surplus. USD will strengthen relative to Euro if US exports more to Europe as compared to its imports.

Geopolitical risk is also very important and can cause the currency of a country to move up or down relative to other currencies. Geopolitical risk refers to the risk of a countrys foreign or domestic policy affecting domestic social and political stability in another country or the region.

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How do you view the forex market is very important. Do you see it as a big mechanical matrix which is devoid of emotions? Most traders have a love hate relationship with the forex market. Most think that the market is either against them or for them.

At a particular moment in time, the market is emanating the emotions of currency speculators sitting on their trading desks or on their computers around the world. The truth is that forex market is just the compressed display of these emotions.

A market is like a big living organism made up of millions of cells. Each cell carries its own functions and interacts with other cells of the body keeping the living organism alive around the clock.

Knowing what the market thinks and how it thinks is crucial to trading success. A forex market comprises millions of participants acting out their perceptions and emotions.

Ultimately, you as the trader are dealing with other traders out there in the market. These traders can be big institutional players or an independent individual trader like you and me. You need to know what the other traders are thinking at anyone time.

What is the market sentiment? Market sentiment is simply what the majority of the market participants are perceived to be thinking or feeling about the market. Market sentiment is the most important factor that drives the currency markets.

Traders form their opinions based on emotions regarding their strengths or weaknesses relative to other currencies. Traders tend to act based on what they feel and think of certain currencies. Market sentiment explains the current actions of the market as well as the future course of action. Market sentiment sums up to the overall dominating emotions of the market participants.

Market sentiment is primarily based on the participating traders emotions. These emotions are one of the greatest factors in the determination of the currency exchange rate. One thing you should know is that market sentiment is not logical.

Market sentiment is like a fickle lover. It is capable of changing its mind based on new information that can upset the existing emotion. Market sentiment can be bearish, bullish or just plain confused.

If the majority of the market participants want to buy that currency, the market sentiment is bullish. If the majority wants to sell the currency, the market sentiment is deemed to be bearish. When most market participants are unsure of what to do at a particular moment, the sentiments end up being mixed up.

Understanding the current market sentiment and exploiting it with an appropriate trading strategy can help maximize your trading profits. If you can understand what the other traders are thinking and why the market is doing what it is doing, you will be in a better position to plan the entry and exit for your trade. In Part II of this article we will discuss what factors influence the market sentiment.

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There are hundreds of ETFs and HOLDRS covering key industry benchmarks such as the various Standard & Poor Indexes, Russell Indexes and the Dow Jones Averages or other less well known narrow based sectors.

You should know the major indexes that are either key benchmarks or have ETFs tied to them. For example SPY tracks the Standard & Poors 500 Composite Index and is the largest of the ETFs.

Standard & Poor: Standard & Poor (S&P) is the financial services segment of the McGraw Hill companies and has been providing independent and objective financial information, analysis and research for nearly 140 years.

It is also the provider of equity indexes and these S&P indexes are also used as the basis for wide variety of financial instruments such as Index Funds, Futures, Options and ETFs. Investors around the globe use S&P Indexes for investment performance measurement.

S&P 500 Composite is one of the most popular indexes in the global financial markets. Hundreds of companies around the world have licenses with the Standards & Poors for their index products. The influence and name recognition of S&P 500 is unparalleled. It is also used as a key benchmark for money manager performance.

The S&P 500 is a capitalization weighted index that tracks the performance of 500 large capitalization issues. S&P 500 represents more than 75% of the capitalization of the entire US Stock Market. Each year thousands of money managers have the single minded goal of outperforming the S&P 500.

The stocks in the S&P 500 are determined by a nine member committee in accordance with the general guidelines. 30 years back most of the stocks in S&P 500 were from the Industrial Sector. Over the years, the complexion of S&P 500 has changed. By 1970s, six of the top companies were from the Oil Sector. In 2000s, technology composed about one third of the capitalization of the index.

The other Standard & Poors indexes are the S&P Midcap 400 Index and it is based on 400 chosen domestic stocks. It is also capitalization based and measures the performance of the midsize companies of the US economy.

The S&P SmallCap 600 Index consists of 600 domestic stocks. These stocks are chosen for market size and liquidity. S&P SmallCap 600 is also capitalization weighted index and is of interest to institutional and retail investors. There are also sub-indexes based on these S&P Indexes.

NASDAQ: You will often hear the Nasdaq market being up or down on a given day in the media. NASDAQ Composite Index contains more than 4500+ companies representing a market capitalization of trillions of dollars.

There is another Nasdaq Index called the Nasdaq-100. NASDAQ-100 is composed of the top 100 nonfinancial companies in the Nasdaq Stock Market like Microsoft etc. It is a modified capitalization weighted index. The QQQ is based on the Nasdaq-100 Index.

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You should understand how to select stop orders to limit your potential losses and how to let profits ride. Managing risk and using systems that helps evaluate price changes is critical for a trader if he/she is to maintain a degree of profitability over time.

Managing risk should be your number one job. The descriptions of the types of stops and the pros and cons of each should help you make the right decisions for the different market conditions. Capturing as much profit as possible from winning trades should be your utmost goal.

You should know the various types of stop loss orders. You should also know where and when to place these stops. Predetermined stop loss orders help you conquer your emotions. Stops should be part of the trading system and included in your trading rules.

Set a stop objective. Weigh the risk/reward ratio before entering each trade. Stop orders can be placed close to the entry level when volatility is low. However, when the volatility is high, stop orders should be placed further from the entry level.

When entering a trade make sure you know where and why to put the stop order. Initially you will form an opinion based on your gut feelings that is substantiated by a trade signal.

However, you will undoubtedly get caught in the news driven price shock events. It makes the markets highly unpredictable in the short run. These news releases create price spikes that may make an adverse move against your position.

Stop orders can also be placed to enter positions. Stop orders that you place online if the market trades at a certain price, then the order is triggered and become a market order to be filled in by the next best price available. Stop orders are placed to protect against losses.

Buy stops are placed above the current market price and sell stops are placed below the current market price. Protective stops are used to offset a position and to protect against losses and against accrued profits.

Stops can be placed on a dollar amount per position. If you want to risk only $250 per $100,000 standard lot position then your stop loss will be placed 25 pips from your entry point. You can set a daily dollar amount on the loss limit.

Traders use 2-5% of the overall account size as their stop loss. Suppose your trading account size is $10,000. You can also use a certain percent of your overall account size as your stop loss. This comes out to be $200-$500.

Many traders tend to turn winners into losers as they get in the let it ride mindset. The trailing stop reduces the chance to let trades ride. Swing traders can use the automatic trailing stop. This makes the decision making process fully automated.

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It may be one of many people’s nightmares to have to go and seek out the correct body shop, having to find a good body shop or fender bender as some may call them is not always easy. The possibility of having to go and see one at some point of your driving career is more than likely, maybe through no fault of yours it may be that someone has by accident scratched the paint on your car.

So, that’s when you start to think about what things you should know before taking your car to the Body Shop. Of course that you can go and just let them do their work, but it’s not the ideal: you have to be aware of the different processes that your car will be involved in.

If you happen to have the paint scratched on your car then the first point of call is your local body shop. Or there are always those who want their vehicle customized, or adding extra parts to the vehicle that will have to be sprayed at the body shop. When customizing your vehicle, for example, and wanting a complete paint job, it is best to shop around before parting with any money to choose the right body shop.

There is also another crucial element and again, it’s something you can ask the collision shop manager. Ask him, “How long have your technicians worked here?” Why ask this? Because you want to know that the technicians are stable and don’t move around a lot. Stability is really the best indicator of employee happiness and job satisfaction. Techs that are happy and satisfied with their work environment and their wages are the ones you want working on your vehicle, for obvious reasons.

Most of today’s body shops are very clean, neat and very well lit. These are usually the ones at the top end of the scale. It is normal for a well run body shop to have different areas of work designated.

For example, there may be an estimating area; this is the area you will bring your vehicle to get an estimate on repairs and where your finished vehicle will be presented. This will normally be well lit so damage on the vehicle can easily be spotted.

If there is major damage on the vehicle then it will be removed to the area set up for disassemble and onto a frame machine. There are fewer cars now that have a true frame, the machine now is really used in straightening the uni-body construction this is typical on most of the modern cars. The term uni-body basically means that sheet metal is stamped, formed, and welded together, forming the structural part of the car’s body.

It is critical to measure the vehicle’s body for correct uni-body alignment. If, for example, there is one millimeter error then that is all manufacturers will allow. Many body shops use a laser measuring system alongside a frame machine these are used to make certain everything is properly straightened.

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