Economic Forex calendar: how it is used for trading
The economic calendar is an important part of Forex trading. With it, traders can find out about upcoming events in the world and the economy, and interpret the implications of this data for the market.
What is an economic calendar, how to use it and on which platforms to search it? Read more about it in this article.
What is an economic calendar
The economic Forex calendar is a tool that informs traders of upcoming economic events that can affect foreign exchange rates and the Forex market. It includes dates and release times for economic news such as employment reports, inflation, retail sales, manufacturing activity and other economic indicators. Such news can affect market sentiment and the willingness of investors to buy or sell currencies.
The economic Forex calendar allows investors and traders to plan their trading strategies based on expected events, monitor economic trends and analyze their market impact. In addition, the economic calendar can help traders avoid the risks associated with economic events and make informed decisions based on fundamental analysis.
Interpretation of Economic Calendars
Most economic calendars are presented in the form of a table. Such tables have multiple columns and the data is listed in descending order by date.
The columns in the tables may be as follows:
– name of the expected event;
– time;
– level of importance;
– value;
– previous value;
– consensus value (or expected value).
Some economic calendars also indicate the asset that the announcement is likely to affect.
In order to correctly interpret the information in the economic calendar, it is important to consider the difference between the value of the current event and its previous value using the consensus value. The difference between the consensus value and the actual value will determine the trend of the asset.
Important indicators on the economic calendar
In order to understand how an expected event will affect a particular asset, it is important for a trader to correctly interpret the economic calendar. One should be able to find both the asset which will be influenced by the news and the level of its influence.
Forex traders use the following indicators for analysis.
Interest rates
They are set by major central banks following monetary policy meetings and have a strong influence on currency pairs.
GDP
This indicator represents the total amount of wealth produced by a country or group of countries every year. Significant changes in this indicator usually lead to significant fluctuations.
Consumer price index
Also referred to as the “CPI”. It estimates the rate of inflation in a country or geographical area based on data on wages, employment and unemployment.
Retail sales
Like consumer prices, they provide an estimate of a country’s purchasing power and inflation rate. They are mainly used to predict future changes in other indicators.
Employment and unemployment data
Statistics that investors are interested in. They show the level of economic growth of the country and can serve as indicators of possible changes in monetary policy.
Platforms with the economic calendars
You can find the economic calendars on financial news sites.
1. TradingView. A web-based platform which also provides a real time economic calendar of events.
2. Forex Factory. A website specializing in Forex news and events and provides an economic calendar.
3. Investing.com. A financial portal that also provides an economic calendar, news, analysis and other information about the Forex market.
4. DailyFX. A website that provides news, analysis and education material for Forex traders, including an economic calendar.
5. Myfxbook. A platform that provides tools for monitoring and analyzing the results of Forex trading strategies, including an economic calendar.
Depending on the broker you choose, you will be able to access the economic calendar with different information and functionalities.
One of the most useful functions is market analysis and event prediction. With this information, once a certain value is published, it can be used as a confirmation or refutation of market expectations.
Some brokers also offer the ability to display only data that may be of interest, depending on the assets traded. Only important publications are displayed, eliminating sources of distraction and therefore providing considerable time savings.
Thus, in order to receive quality information about forthcoming economic events, it is important to choose your broker carefully. Moreover, it is important to pay attention to the functionality of a broker’s economic calendar and its informative character.
To sum up
Economic calendar is used to keep traders informed about important events in Forex or other financial markets.
Regardless of where you study the trader’s economic calendar, you get access to information and events, the exact dates and times of economic news publications, as well as the level of importance to the market of a particular publication.