An economic calendar is a sort of chronology of global economic events that are sorted by level of importance. The list of events includes political and economic news, speeches of economic figures and publication of economic indicators of different countries. Each news item corresponds to the exact time it is released and its market impact. All these events are called indicators and together they have a very large impact on the Forex market.
Who needs the economic calendar and why?
In short, traders need the Forex economic calendar to trade successfully in the economic market. In more detail, for successful trading, a trader needs to analyze many factors. For example, this includes almost everything that happens in the world from unemployment and presidential elections to cataclysms and natural disasters. In addition to the fact that there is a lot of these news, they also affect the market in different ways. Therefore, it is simply unrealistic to systematize these data without improvised means. It is for processing large volumes of information and optimizing their use that such a tool as trader's event calendar was created.
How can a trader use the economic calendar?
how to use the economic calendar
Since the publication of important financial news always assumes the market movement, every day a trader should start with the latest events of the economic world. With the help of the economic calendar it is possible to compare and predict price movements, as well as to observe what influence specific events have had on the market in the past and how some of them may affect the situation in the future.
The basis of any calendar is time and the trader's economic calendar is no exception. When a trader knows the release dates of specific indicators, has available data on past and current values, he can compare them with analysts' forecasts. If, in fact, the indicator turns out to be higher than the one predicted, the currency market is likely to react with the growth of the national currency.
If you know how to use the economic calendar, you can significantly increase your chances for a positive outcome of the deal. Therefore, when working with the economic calendar, you should consider several recommendations.
It is better to give preference to important news and not to be distracted much by insignificant indices. News should be analyzed to understand its importance for the market and be prepared for possible consequences. If you do not have confidence in the correctness of the news release, you can place orders 15-20 minutes before the news release. You should remember that you cannot trade during the news release. Because the trend line may change direction. You should take into account the tendency of news release related to each other. Determining the news trend may turn into a good profit.
Usually economic calendars are updated immediately after the release of key financial news. Therefore, when choosing a calendar, it is better to stop at the one that updates the page independently. This way, the trader will always be provided with the latest information and he will not need to be distracted to refresh the page manually. This is very important, because delay can be expensive.
trader's calendar of events
Since most events on economic calendars have a tangible impact on price movements, it is very important to consider the market's response to specific news releases. There is no universal recipe for success. It is only worth noting that if your strategy is not designed for sharp market fluctuations, try to avoid trading during the release of important news. If, on the contrary, you like risk, then the time of news is your time. Of course, your instincts and intuition will come with experience, but you can and should use the economic calendar to quickly assess the situation and choose the time to enter the market.
Experienced traders often use several calendars, combining their advantages into one universal analysis tool. Therefore, as a conclusion, we can say that if you are involved in Forex trading, or want to do it, you need an economic calendar. If you are not related to Forex yet, then you may not need the economic calendar... but traders are not born.