Tag: economic calendar

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Beginners Forex Education Forex Basics

How to Correctly Use an Economic Calendar

The Economic News Calendar, also known as the calendar of economic events, plays an important role in the life of every trader and investor in the world, whether this is a minor trader who speculates with a personal account or an operator trading as part of an institutional trading network (institutional operators). An economic calendar […]

The Economic News Calendar, also known as the calendar of economic events, plays an important role in the life of every trader and investor in the world, whether this is a minor trader who speculates with a personal account or an operator trading as part of an institutional trading network (institutional operators). An economic calendar […]

The Economic News Calendar, also known as the calendar of economic events, plays an important role in the life of every trader and investor in the world, whether this is a minor trader who speculates with a personal account or an operator trading as part of an institutional trading network (institutional operators). An economic calendar is a tool that shows the fundamental events that affect the trading environment of financial markets.

In financial markets like Forex, there are certain announcements that are made with some frequency that highlight very important events in the socio-political and economic world. These announcements come from government agencies, central banks, private organisations, lobbyists and others, and can sometimes serve as reference points on which economic policies are based and strategic movements are made in the business and political landscape.

For example, the onset of the global financial crisis led Governments around the world to respond in a political manner in accordance with how their countries and Governments were affected by the events from 2008 to 2010. In the eurozone, the sovereign debt crisis has boosted the change of governments, the implementation of economic policies and decisions. In the United States, we saw the birth of the Asset Rescue Program in Trouble (TARP), several major bailouts, and the easing policies of the Federal Reserve Bank. Several of these decisions were made around the world, changing the aspect of the calendar of economic news as we know it, forever.

The globalized nature of the world today means that these announcements directly affect the global economy, with far-reaching effects on how we live our lives and how future events will shape our future. Financial market operators have had to come to understand how these announcements affect the investment climate in a country, region, or global markets, and depending on the content and tone of these economic announcements, positive or negative sentiment in a currency, market or economy can develop. This in turn leads investors to operate in different markets in a certain way, as a result of the volatility that occurs. These ads are known as market news.

Market news is not published randomly but is published according to a well-planned month-to-month calendar, in a full-year cycle. This economic news publishing program is what is known as the economic calendar. For Forex traders, it is also known as the Forex calendar or Forex news calendar, because most of the news it shows has an immediate and direct (and sometimes lasting) impact on the currency market. Indeed, the economic calendar affects all markets, although the degree of affectation varies.

Components of the Economic Calendar

What is the Economic News Calendar made of? What is in this tool that traders need to consider? Here is a detailed description of the specific components of the Economic Calendar:

The date and time of publication of each economic news item included in the calendar. In this case, the operator can clearly see the exact time when the news will be released, which usually appears in Eastern United States time by default. Some economic calendars have tools that allow the operator to change time settings to match their local time. However, the global standard of reference is eastern time in the United States. Therefore, the operator needs to know how far from the Eastern Time Zone of the United States its own time zone is, in order to know the moments of the day when it must be attentive to the markets.

The economic news itself. Logically the trader should know what is economic news to be published and with which he is trying to act accordingly.

Below is a nice video created by Trading 212 regarding Economic Calendars…

In the case of Forex, the currency of the country of origin of each news item. This is the currency that is usually affected by the news, and therefore traders will be on the lookout for the currency pairs in question to see which pairs present the greatest trading opportunities. Usually, the ISO abbreviation of the currency will be displayed, or the flag of the country with the affected currency will be displayed.

The degree of impact on the market of the publication of the news. This is an indication of how strong the impact of the news can be on markets, measured by the degree of market volatility and the range of price movements. News on an economic calendar is classified into low-impact (green), medium-impact (amber), and high-impact (red) economic news. Some calendars will use the colour codes next to the news, while others may use stars (*) to indicate the degree of impact on the market so that the highest-impact news has a 5-star rating (*****) and low-impact news has two stars or even a single star.

Some economic calendar providers will display a «Detail» box. Operators can click here for more information on a particular news item, as well as the impact on the market in case there are higher than expected or lower than expected numbers.

Economic calendars usually show the previous value, expected value, present value, and revised value of each economic news item. This is where traders can get information about the benchmarks for each data and the actual numbers of the news as it arrives. Some providers provide a historical chart or template that shows the performance of a particular story in recent months or years for comparative analysis.

Sources of Economic News Calendars

The economic calendar can be obtained for free on the websites of almost every major Forex broker. There are also other external providers that can be useful. It is up to each trader to search the websites of Forex brokers, online market analysis sites, online forums related to markets, and analysis service providers to find a good economic calendar that offers complete and up-to-date information. Different economic calendar providers can add certain features that will make their calendar versions more attractive. This does not affect the dates and times of publication of each news item.

How to use the Economic Calendar?

Now that we know what the content of the economic calendar is, it is essential to understand how to use it correctly. While there are no strict rules on the use of economic calendars, here’s a guide on how this tool can be used to trade in markets like Forex.

Rule 1: Always study the news program on the economic calendar in a block of time of an allowance, and do this for the following month in advance. This is so that the trader can take note of the high-impact news and the dates and times on which this news is scheduled for publication. This allows you to plan your operations accordingly, so that you do not have open positions that may be negatively affected by the publication of the news, eliminating its gains or significantly increasing the unrealised losses of losing trades. It is impressive how many traders simply ignore this simple fact, at their own risk.

Rule 2: Use world time tools (showing the current time in any time zone) available in the search engines to know the time difference between the local time and the time shown in the economic calendar. This will allow you to adjust your time settings accordingly. This will help you not to miss the negotiation opportunities that will bring particular economic news.

Rule 3: Use historical data to study how a particular story affects markets. If you want to know what is the way in which a currency pair or index will react to the publication of a certain economic news item (as an important economic indicator), then the most appropriate response might be to study your past behavior using historical data and graphs. This will prevent a trader from setting a profit goal of say 100 pips, for a story that will only move the market around 50 pips, for example. It will also help to know whether an individual economic news item is unstable.

Rule 4: Trading only with high-impact news is recommended, as these are the events that move markets and create the volatility needed to produce good trading opportunities. Low-impact economic news does not create enough volatility, and therefore is not suitable for high-profit markets because it generates small-scale movements.

Rule 5: Use calendars that have automatic update tools that add the current numbers to the calendar at the time the news is published. This will help you closely monitor your operations.

Conclusion

In summary, we can conclude that an economic calendar is an important tool for traders in all financial markets. It must be used in a complete and correct manner so that operators can derive the maximum benefits from the information it provides. Sometimes an operator may have to combine two or three calendars in order to get everything they want from an economic calendar, as some may have additional features and have shortcomings in other respects.

Trading is mainly based on planning. Knowing the economic calendar well in advance can help the trader to plan his operations in such a way that he does not end up trapped in some of the surprises that may occur during economic news publications.

Also, note that the market is constantly evolving. Some economic news that was low-impact a few years ago has become more important to markets and has a high impact due to the emergence of new sectors that are now engines of the global economy. An example of this is housing data in the United States. Before 2006, some of the housing sector indicators were not very important, but as the subprime mortgage crisis was identified as the main cause behind the global financial crisis, US housing data has become a highly monitored economic news item.

Finally, the trader should be aware of adding new economic news and removing some that are irrelevant and even archaic. Some of this news can be highly impacted, such as the JOLTS employment report from the United States, which was born out of the labor sector crisis in that nation.

Categories
Forex Market

The Economic Calendar and Why It’s So Darn Interesting

Today we’ll go with an entry about a tool that interests a lot of you, the economic calendar, and its impact on Forex trading. It is constantly updated so that you have access depending on the day you are looking at it. To get started, let’s see what this tool is and why I tell you that it is a tool that should interest you a lot if you trade in currencies (or any other type of asset).

Today we’ll go with an entry about a tool that interests a lot of you, the economic calendar, and its impact on Forex trading. It is constantly updated so that you have access depending on the day you are looking at it. To get started, let’s see what this tool is and why I tell you that it is a tool that should interest you a lot if you trade in currencies (or any other type of asset).

Today we’ll go with an entry about a tool that interests a lot of you, the economic calendar, and its impact on Forex trading. It is constantly updated so that you have access depending on the day you are looking at it. To get started, let’s see what this tool is and why I tell you that it is a tool that should interest you a lot if you trade in currencies (or any other type of asset).

Index

  • What is the economic calendar?
  • Is a Forex calendar important?
  • When should I look at the economic agenda?
  • What is important in a macroeconomic calendar?
  • Trading based on macroeconomic data.
  • Technical analysis, fundamental analysis, and the economic agenda.
  • Where to look for Forex news data
  • Publication of macroeconomic data
  • Global indices and commodities
  • How do I use the economic calendar?
  1. What is the economic calendar?

An economic calendar, as its very name indicates, reflects when and what economic issues will be published globally. It can be the decision of interest rates on the part of a country, indices production prices, balance of trade, economic events. In short, it shows you any event that could affect the economy and the financial markets.

  1. Is a Forex calendar important?

As you know, in the Forex market (as in all) price movements are impacted by the news, macroeconomic data, government decisions, and more. Therefore to follow an economic agenda allows us to know when the greatest movements in the market will take place. We can even use this to not do trading or even as some traders do, do news trading.

  1. When should I look at the economic agenda?

Depending on the frequency of your trading, if you do swing trading (trades that last several days) it may have little relevance in your trade and just look at it once or twice a week. If on the contrary, your operation is more aggressive, reviewing the economic calendar each day can give you an optimal point of view of the market. You know, more day trading, more focus, which is something that doesn’t sell much but that’s there.

  1. What is important in a macroeconomic calendar?

If you take a look at the agenda above you will see that many days have published enough data and many of them are not very important. This you can set to stay only with those that are really important. Even sometimes, those that are a priori important generate little movement in the market. Still, don’t trust yourself.

  1. Trading based on macroeconomic data.

It is very popular to read or listen to some traders say they trade forex with news. What they look for with it when there is high volatility is to gain a lot in a very short time. Careful, the message sounds very nice but the reality is not so much. High risk is also something to calibrate well, in addition, to stop loss sweeps, landslides when entering the market. You must keep these issues in mind.

  1. Technical analysis, fundamental analysis, and the economic agenda.

Whether you do technical analysis or fundamental analysis, the economic agenda really matters. You might think that since you do technical analysis, you don’t care about this whole macroeconomic news thing. You can really do that in part, but to follow the market keep them present or you can get some upset. If you’re in a pretty big position within the pound and there’s news about the UK Brexit referendum, this may annoy you, to put it mildly.

If you focus or are focused on fundamental analysis to make buying and selling decisions you will know the importance of following the macro calendar and will work with economic data as a source to make your decisions. 

  1. Where to look for Forex news data

On this very page, up. In addition, there are other well-known ones such as Investing, FXstreet, and different portals where you can see these types of calendars, each with a different style. In the end, it’s a matter of taste, choose the one you like the most and where you feel comfortable. The source of the data is usually the same.

  1. Publication of macroeconomic data

Some people are obsessed with when this data is published to buy or sell based on how good or bad this data has been. Error. Two points:

In free portals the publication of the data is done with some delay and to avoid this we should hire platforms like Bloomberg (it is a paste to keep them for the independent investor and do not make much sense). But even so, today the execution of orders mostly goes by algorithms. In the time it takes to observe the data, you open the broker and place an order, the algorithm may even have already closed the position. Focus your goal on other more profitable patterns.

Another thing, do you think that just because a piece of data is better than expected, it’s gonna benefit an asset that goes up or vice versa? The answer is no. Sometimes this is discounted on the price already or the data is good but worse than expected. If you are a retail trader, I recommend that you do not enter this war unless you are very clear about it.

  1. Global indices and commodities

You may wonder if this agenda is only for the Forex market or has any use in the case of trading in indices or commodities. Macro data from China without going any further are moving most of the world indices. Events in the United States cause major markets, including European indices, to be affected both positively and negatively.

Another example is oil, which in turn has a direct relationship in some currency pairs due to the countries where it is traded and where there are large reserves. The publication of oil inventories is very important data that is taken into account by investors and traders. In the end, they affect the asset or country in question, either directly or indirectly, and it is important to have control of its publication so that you do not get caught out of play.

  1. How do I use the economic calendar?

I’ll tell you how I use the economic calendar and how you can use it yourself. If you do algorithmic trading as is my case, that is, you have automated in and out of market operations, you can carry out different actions:

-Create strategies that avoid operating at times where high-impact news is published for markets (for example, on Fridays at midday).

-Adjust systems to market volatility. We can calibrate the amount and distance to stop loss based on price variability. If it is high, it is advisable to leave more distant stops so that you do not jump at the first change with strong movements. Indicators like the ATR (Average True Range) for example can help you in this.

-Disconnect systems when there are Brexit events or important government decisions at any given time.

Beyond that you can design them yourself according to your preferences, here are some ideas. In a habitual way, apart from this type of facts, I use the economic agenda like this: the weekend where I usually look at what publications there will be in the next days and every morning when I wake up where I review only the data and the next hours (of that day).

Don’t worry if you can’t stay on the screen because you work or are busy. In addition to the Internet browser you normally use, there are mobile apps that allow you to view them. In fact, you can already do it from your smartwatch. It’s not that you’re obsessed with constantly refreshing the page or app to see what’s going on, just remember that it’s all about having control.

Categories
Beginners Forex Education Forex Basics

Economic Calendars and Forex Trading

An economic calendar keeps track of important news events and announcements that could affect the movement of a specific asset or the market as a whole. Economic calendars serve several different purposes and are especially useful considering that a lot of financial information can be released in a very small time span. If you’re looking […]

An economic calendar keeps track of important news events and announcements that could affect the movement of a specific asset or the market as a whole. Economic calendars serve several different purposes and are especially useful considering that a lot of financial information can be released in a very small time span. If you’re looking […]

An economic calendar keeps track of important news events and announcements that could affect the movement of a specific asset or the market as a whole. Economic calendars serve several different purposes and are especially useful considering that a lot of financial information can be released in a very small time span. If you’re looking to trade the news, then this is a must-have tool, although every forex trader needs to use one. This is what you need to look for on an economic calendar:

  • Monetary policies related to interest rates: this is related to changes in current interest rates imposed by national banks or when national banks or other accredited institutions make predictions about where interest rates will go. 
  • Monetary policies related to inflation: inflation is closely related to interest rates because national banks will adjust their interest rates to lower inflation.
  • GDP: this is the ratio of imports vs exports in a country. Having more imports versus exports generally signifies that a government is in debt, which is bad for investors. 
  • Employment rates: this is one of the main indicators of whether an economy is thriving. Investors typically steer clear of countries with high unemployment rates.

Investors need to be aware of the above because it gives them an idea of how the economy in a country is doing. News releases, especially related to finances or government policies, cause investors to make decisions. Some of these items are announced monthly, while others are released quarterly. 

In addition to keeping track of economic impacts, economic calendars also serve several other important purposes for forex traders:

  • They can tell you when to enter or exit the market: many traders enter or exit the market based on events that are indicated by their economic calendars. Trading in the direction of news events is one of the most popular trading strategies. Do keep in mind that unexpected events may take place, so it is good to have risk-management precautions or to look at other data.
  • They can help one to avoid an extremely volatile market: some volatility is good because it presents a number of opportunities to buy and sell, but too much volatility is dangerous for traders. It is more difficult to analyze the market when it is more volatile. Your economic calendar will let you know if there is going to be bad news so that you can avoid trading in these conditions altogether. 
  • They can help you get ahead: many beginners ignore economic calendars because they don’t understand how they work or how efficient they can be. Using one can help you get a better start than those traders, and it can also be helpful to those keeping a trading journal. You’ll be making better, more informed decisions and you’ll have more information to log. 

Economic calendars keep track of a lot of information. This is one of the main reasons that many beginners don’t bother with them. Many of these calendars will allow you to filter events by importance so that they can be used more efficiently. Events are labeled by colors to indicate the expected impact they will have on the market. Yellow indicates a low-impact event, orange indicates a medium-impact event, and red signifies events that should grab your attention. As you become more comfortable using an economic calendar, you’ll become more aware of what affects the market significantly and what doesn’t. 

As we conclude this article, we will remind our readers that economic calendars are must-have tools for any trader. Whether you’re just getting started or you’ve been trading without one, you need to learn how to use them to make better trading decisions. If you’re wondering where to find one, you should know that many brokers offer economic calendars on their websites for free. Try checking the education or tools section on your broker’s website. If you don’t have a broker yet or if your broker doesn’t offer them, then you can do a quick Google search for “forex economic calendar” to find many different options online.

Categories
Forex Videos

Become A Better Forex Trader By Utilising The Economic calendar

https://youtu.be/39wMrQXLydI

https://youtu.be/39wMrQXLydI

https://youtu.be/39wMrQXLydI

Unlock The Hidden Secrets Of The Forex Economic Calendar

In this video presentation, we will be looking at the economic calendar pertaining to the forex market and how It can be extremely useful to traders who implement the knowledge in their fundamental analysis.


Example A, The economic calendar is a fundamental resource that tells traders about economic data releases, which are due to be released by governments or independent research establishments, which collate statistics pertaining to the economic activity of a country and whereby these statistics are released daily, weekly, or monthly. Such data varies in importance to the market from low risk to medium and high risk. The higher the risk, the greater potential for extra volatility impacting those associated currencies whose countries have released the data, and of course, this will likely affect every pair traded and even, on some occasions, have a knock-on effect on other currency pairs as markets adjust to risk sentiment post-release.
Economic calendars are widely available, and where most brokers will provide one. Here we are looking at the economic calendar as provided by the broker EagleFX.

Traders keep a careful eye out for the events in the economic calendar, which are scheduled for release because these events can help traders plan trades throughout the days, weeks, and months, depending on their style of trading. They use the released data to set up trades while also mitigating against risk.
The most keenly observed data releases and the ones which potentially cause the largest amount of volatility post-release are gross domestic product updates, interest rate decisions by central banks, and on the first Friday of each month nonfarm payrolls, which relate to unemployment in the United States.
Learning you to navigate the economic calendar will save you time. It is generally displayed in a linear fashion, on an hour by hour and day by day basis.


Example B, Information is key when trading currencies, and economic calendars are a fantastic tool to keep you informed of major news events in the diary and will potentially greatly enhance your trading.

Example C, In this example, we can see that on Tuesday, April 7th, the Royal Bank of Australia is to make an interest decision at 4.30 AM GMT and where the importance is signified by the red lines, which indicates this as a high-risk event. Traders will be keeping a close eye on the Australian dollar and associated currency pairs being traded against it leading up to and just after any announcement by The Royal Bank of Australia.

Example D, The flag beside the type of economic data release denotes the country that is releasing the data, in this case, Germany.

Example E, And the time of the release is usually on the left-hand side of the calendar. This is typically the time of the source of the release.

Example F, So here we can see that in this example, the Netherlands will be releasing its consumer price index year on year for March 2020 and where this information will be released as low importance and is not likely to affect market volatility.

Example G, In this example, the Japanese will be releasing leading economic index preliminary data for February and whereby this information is medium risk and Michael’s market volatility.


Example H, Another important feature of an Economic Calendar data release information which is highlighted here. The previously released data pertaining to the country in question is available on the calendar in the lead up to the current release, and also some brokers will show a market consensus of the data as suggested by various analysts who suggest what they believe the figure will actually be. Upon data release, the actual figure will be updated on the calendar in a timely fashion. The majority of data releases are subject to an embargo where institutions are not allowed to benefit from data, which could cause insider dealing in the markets. While all of this may seem slightly daunting to new traders, it is important that you understand the significance of fundamental data releases and how they will help you to become a better trader.

Example I, As you become more knowledgeable, you will learn how to filter out various parts of the economic calendar which you may deem as not so important, and these can be reduced to certain countries data releases, and therefore their currencies being emitted to your calendar or even filtering it down to only high-risk news events being shown on your calendar.

Example J, Here we have filtered out all currencies apart from the Great British pound and the United States dollar for our calendar for next week. This is a great option for traders who only trade the GBPUSD pair, also known as cable. The economic calendar is, therefore, a customizable tool for your convenience.
Failing to observe the release of economic events is inherently risky. If economic events happen and you are not aware of them, it could dramatically affect any open trades or trade ideas which you may be about to set in place.
Therefore it is vitally important that you incorporate the economic calendar into your daily trading routine. Make a habit of checking it in the morning, and in the evening, It will pay dividends in the long run.