A Simple Explanation of the US Economy for Traders 
A Simple Explanation of the US Economy for Traders
by InformedTrades
Video Lecture 53 of 77
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Date Added: May 7, 2017

Lecture Description

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An overview of the US Economy and the first two components of the economy which are natural resources and the labor force. Explanation meant for traders of the forex, futures, and stock markets.

In our last lesson we gave an introduction to fundamental analysis with an introduction to the top down approach to analyzing fundamentals

and the US Economy. In today's lesson we are going to expand our discussion on the

US economy by looking at the different pieces which make up the economy and how each piece is relevant to us as traders of the stock, futures, and/or

forex markets.

The first component of any economy is its natural resources. One of the key factors that allowed the United

States to grow so quickly and become one of the world powers that it is today, is that it is a land that is rich

in natural resources from oil which drives our industry, to lumber to build our houses, to our large coastlines,

great lakes, and rivers which provide shipping access and move goods throughout the country.

Understanding what natural resources are most important to a country and understanding what affects the prices

of those resources is beneficial to not only commodities traders who trade the actual commodities such as oil

and gold but also to traders of the stock and forex markets. We will go into these correlations in more detail

in later lessons but a short example is that the US economy relies heavily on oil, so when the price of oil goes

higher this is normally seen as a negative for the US Economy as it then costs more for companies to ship their

goods, and for individuals to fill up their cars leaving them less money to spend. Similarly, as the US Imports

much of its oil, when the price of oil goes up this means that more dollars are being sold and converted into

the currencies of the countries which are exporting the oil to the US, therefore all else being equal weakening

the US Dollar and strengthening the currency of the exporting country.

The next component of any economy is its labor force, or the individuals who are working in that economy to

produce goods and services from the countries natural resources. As the labor force in an economy gets paid for

their labor, and then spends that money on the goods and services they and other components of the labor force

have produced, they are an important driver of growth in any economy.

The components which are watched in regards to labor are the size of the labor force in an economy, its rate of

growth, its productivity level, and its skill level, and its mobility or ability to adapt to changing

conditions. Another reason why the United States has the largest economy in the world is the size of its labor

force is constantly growing allowing the economy to produce and sell more goods and services, it is a relatively

mobile labor force which has allowed it to increase productivity faster than other nations through things such

as early adoption of new technology, and it is an educated labor force.

Why is this important from a trading standpoint? Here again we will go into more detail on this when we look at

important economic numbers but a short example is if the labor force becomes more productive, this means that

they are able to produce more goods in the same amount of time. This not only makes companies more profitable

but it holds down prices for the consumer, giving them more money to spend on other goods and services, which

drives growth, which means a higher stock market all else being equal. This increased growth can cause higher

demand for commodities therefore causing the commodities markets to rally all else being equal, and can also

have interest rate implications, something we will learn about in later lessons, which can affect the US

Dollar.

Course Index

  1. Intro to Technical Analysis
  2. Introduction to Dow Theory
  3. Second 3 Tenets of Dow Theory
  4. How to Read Stock Charts
  5. How to Trade Support and Resistance
  6. Multi Time Frame Analysis
  7. Introduction to the Double Top and Double Bottom Charting Pattern
  8. How to Trade Double Tops Like a Pro
  9. How to Trade the Head and Shoulders Pattern Part 1
  10. How to Trade the Head and Shoulders Pattern Part 2
  11. How to Trade the Wedge Chart Pattern Like a Pro Part 1
  12. How to Trade the Wedge Chart Pattern Like a Pro Part 2
  13. How to Trade the Flag/Pennant Patterns Like a Pro Part 1
  14. How to Trade the Flag/Pennant Patterns Like a Pro Part 2
  15. How to Trade Triangle Chart Patterns Like a Pro Part 1
  16. How to Trade Triangle Chart Patterns Like a Pro Part 2
  17. Learn to Trade with Technical Indicators
  18. How to Trade Moving Averages Like a Pro (Part 1)
  19. How toTrade Moving Averages Like a Pro (Part 2)
  20. How to Trade the MACD Indicator Like a Pro (Part 1)
  21. MACD Indicator: Trade it Like a Pro (Part 2)
  22. How to Trade the Relative Strength Index (RSI) Like a Pro
  23. How to Trade Stochastics Like the Pro's Do
  24. The Difference Between the Fast, Slow and Full Stochastic
  25. How to Trade Bollinger Bands - Stocks, Futures, Forex
  26. How to Trade the Average Directional Index (ADX)
  27. How to Trade the Parabolic SAR
  28. How to Trade Candlestick Chart Formations Part 1
  29. How to Trade Spinning Tops and Doji Candlestick Patterns
  30. How to Trade the Bullish/Bearish Engulfing Candlesticks
  31. How to Trade the Hammer Hanging Man Candlesticks
  32. How to Trade the Morning/Evening Star Candlestick Pattern
  33. How to Trade the Inverted Hammer/Shooting Star Patterns
  34. Why Most Traders Lose Money and The Solution
  35. Why Traders Hold On to Losing Positions
  36. Two Trading Mistakes Which Will Destroy Your Account
  37. Herd Mentality is the Psychology That Leads to Big Trading Losses
  38. Profit Expectations: What Millionaire Traders Know
  39. How to Join the Minority of Traders Who Are Successful
  40. How To Determine Where to Put Your Initial Stop Loss Order
  41. How to Use the Average True Range (ATR) To Set Stops
  42. How to Up Your Chances for Profit When Setting Stops
  43. How to Reduce the Chances of Being Stopped Out on a Trade
  44. How Successful Traders Use Indicators to Place Stops
  45. Stop Your Mind From Causing You to Take Profits Too Soon
  46. How To Use Trailing Stops
  47. Why Position Sizing is So Important in Trading
  48. Why Fixed Position Sizing Is Not the Best Way to Trade
  49. Trading The Martingale and Anti Martingale Strategies
  50. How to Set Trade Position Size for Maximum Profits
  51. Maximize Trading Profits with Correct Position Sizing 2
  52. Fundamental Analysis and The US Economy
  53. A Simple Explanation of the US Economy for Traders
  54. Simple Explanation of The US Economy For Traders Part 2
  55. The Business Cycle and Fiscal Policy - What Traders Know
  56. How Interest Rates Move Markets
  57. What Traders Know About Interest Rates Part 2
  58. What Traders Need to Know About The Structure of The Fed
  59. How the Fed Changes Interest Rates
  60. How to Determine When the Fed is Going to Change Rates
  61. Why Markets Move Ahead of Interest Rate Announcements
  62. How to Trade the GDP Number (Part 1)
  63. The Components of the Gross Domestic Product (GDP)
  64. Intro to Trading Non Farm Payrolls (NFP's)
  65. Trading the News - Economic Numbers - Retail Sales
  66. Trading the News - Economic Numbers - ISM Manufacturing
  67. The Producer Price Index (PPI)
  68. The Consumer Price Index (CPI)
  69. Trade the News - Existing Home Sales Index
  70. How To Interpret the Consumer Confidence Index (CCI)
  71. How to Interpret the Index of Leading Economic Indicators
  72. The Advantages and Disadvantages of Day Trading
  73. The Advantages and Disadvantages of Swing Trading
  74. The Advantages and Disadvantages of Position Trading
  75. How to Keep a Trading Journal
  76. The Most Important Attributes of a Good Trading Journal
  77. The 20 Components of a Successful Trading Plan

Course Description

This is a series of 77 short video lessons meant to give traders an introduction to the basics of trading as well as the components necessary to develop a profitable trading plan.

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