“There is no bigger waste of time than doing 90 percent of what is necessary.”                – Thomas Sowell

Howdy, gang!  I trust that all is well for you and that you’re completely finished with your Christmas shopping!  As a kid, there was nothing better than Christmas; as a father, I need a nap just thinking about Christmas!  It’s still a great holiday for visiting family and spending time with loved ones…for most of us.  Bear in mind that there are plenty of folks around us who don’t really have anything to look forward to this holiday season.  I’d like to challenge all of us to reach out to those around us and invite them to your home on Christmas Eve or Christmas Day for lunch or dinner…or anything else you can think of.  I can tell you from personal experience that it will mean a lot to the people you invite even if they can’t (or won’t) accept.  It’s the little things that tend to make a big difference.

The previous three blog submissions in “Know Good Things” have been about a more specific nature relating to how we interpret economic data.  Most of the economic reports that are issued on a weekly, monthly, or quarterly basis include information that we can utilize as traders especially if we embrace the mindset of “assessing the markets.”  In my humble opinion, we should be assessing the broad markets (DOW, SP500, NASDAQ, etc.) on a daily basis, but I think we could get away with it if we did it weekly depending on the type of trading that we’re doing.  The reason for this is hopefully obvious.

If we’re looking for positions to take in the stock/options market (even if it’s a short-term position; swing trade or day trade) then it makes sense to try and involve ourselves in trades that go with the general trend rather than trying to swim against the current.  It doesn’t say a lot about our individual abilities as if we’re simply placing trades just to place them while essentially ignoring the larger picture all together.  It says even less about us if we’re ignorant towards the general trend of the markets/economy!  We really should have a good feel for the general nature of the markets as we search, scan, plan, and research interesting trade opportunities.  It’s a matter of probabilities, really.  Anything we can do to increase the odds of success makes us more likely to be routinely profitable.  At the very least, it decreases the likelihood that we’ll suffer losses that are larger than necessary.

There’s a lot that goes into fully understanding the nature and impact of economic reports and how it all relates to our individual trading tendencies.  The biggest factor that you need to keep in mind is: TIME.  This is not something that you simply read about and it suddenly makes all the sense in the world!  It takes time to learn and understand the significance of the reports that are issued.  It takes time to cultivate a feel for the likely impact of the reports.  Yes, it takes time to develop an “economic trend” just as it takes time to develop a trend in any stock.

Last week (December 11^th through December 15^th), there were a total of 56 individual listings for economic reports as shown on the economic calendar.  Which of these reports merit special attention?  What kind of impact (positive or negative) will these reports have on the markets?  How long will it take for the impact of these reports to manifest in the markets?  These are all questions that you’ll undoubtedly be able to answer in a comfortable manner as you gather more confidence and experience, but for the time being you simply need to spend TIME getting familiar with them.

We have a calendar posted in the Tackle Trading website that I encourage you all to start paying attention to.  The direct URL is: https://tackletrading.com/trade-center/forex-calendar/ and it’s relatively easy to navigate.  I would suggest that you use the “shift key” on your keyboard and select the entire week when you decide to spend time looking at the calendar so you can get a feel for what’s ahead.  There are several different economic calendars found on the internet that you can utilize, as well.  Some of the other calendars simply offer a different aesthetic, while others offer a more inclusive interface that allows you to gather more information (and opinion) on various economic reports.

For instance, I like to visit the calendar that Bloomberg creates primarily out of habit (it’s the calendar I’ve personally used for more than a decade), but also because of the informational layout it offers when I click on an individual report.  My recommendation is for you to definitely begin spending time looking at (and thoroughly investigating) the calendar found on our website at Tackle Trading and begin developing your own personal economic trend.  Learn about the individual reports by researching them and finding out what type of information they offer.  You’ll soon begin to notice that some reports are a little bit more important that others; some are leading indicators and others are lagging.  With 56 individual reports scheduled for just last week it can definitely feel a bit overwhelming at the beginning!  Don’t get anxious and don’t lose confidence because just like everything else in life…it gets easier.  As soon as you begin to feel more comfortable then definitely feel free to begin researching more information throughout the internet.

So, hunker down!  Make the decision to spend a specific amount of time reading about and learning the various types of economic reports.  Get a notebook that’s wholly dedicated to macroeconomics and leave it next to your computer so you don’t forget to continually update it.  Write questions in it as well as the answers, which you’ll certainly find along the way.  Keep track of the changes in certain reports (like Housing Starts and MBA Mortgage Applications, for example) along with personal notes/thoughts pertaining to those reports.  You’ll find that the notes and thoughts written by your own hand will be a source of strength and information as you eventually become the next “Econ Guru”.

If you think that it would be a good thing to have a working knowledge and advanced understanding of macroeconomics then you have to decide (now) to put the time in.  As it is with life in general, you will indeed reap what you sow.

Reap away, my friends…and, as always: Be good.  Do good.  Know good.

Kleiny (@KnowGoodThings)

Columbus, Indiana