Tag: Market News

Categories
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 Videos

Biden Shows His Cards – This Is How The Market Is Preparing To React!

https://youtu.be/IVvDckE_dRg

https://youtu.be/IVvDckE_dRg


Biden shows his cards, markets are rattled! – where next for the US Dollar?

Thank you for joining this forex academy educational video.

On Thursday the 14th of January, president-elect Joe Biden addressed the US nation and said that ‘’the $600 already appropriated is simply not enough’’. 

He carried on by saying that the new democrat government would issue another round of $1,400, on top of.the $600 payments, thus showing his hand with regard to the 15 million adult dependants relying on these stimulus checks.  This segment of the Covid relief package runs to 1.9 trillion dollars. 

With yet many more millions of Americans, including migrants, who have slipped the net with regard to relief packages, the wranglers about entitlement will go on as long as the pandemic continues to run rife throughout the United States.  With some young adults purchasing new cars with the extra cash, and others boasting of savings of $13,000 from the relief payments, it is hardly surprising that there will be continued frictions between the two parties, let alone the public and pressure groups, which will only go to show that this is not a one-size-fits-all policy.

Markets saw volatility following the comments with the dollar index shown here on the daily time frame, recovering from its low of 89.15, in the dollar-weighted average against the pound, the Euro, the yen, Swiss franc Canadian dollar, and Australian and New Zealand dollars. 

Although the rot stopped on the 6th of January, dollar strength has been conforming to this support line, on the 1-hour chart, which was bolstered by Joe Biden’s comments on the 14th , to the point where we have a high of 90.80 at the time of writing.

While the bull run on the US dollar may be partially down to Joe Biden’s covid relief policy,  there are other factors to consider, including the buy the rumour sell the fact trading phenomenon, where market participants were largely expecting the incoming President to instigate a larger relief package and especially now that the democrats are in control in Congress, thus making it more easily to be able to get through new policies.

Other things to consider, as shown here on the daily cable chart, where the pound to US Dollar pair remains in a bull run, although it has topped out at the 1.37 exchange rate, having achieved the high due to the success of the UK and EU signing a post Brexit free trade deal,  which has been giving the pair a lift, but where the United Kingdom is currently in a tier 4 lockdown due to the increasing covid transmission rate.

 

 Here we can see a daily chart of the euro US dollar pair,  which is by volume the largest traded component  on a weighted basis of the dollar index,  and where we can see CIA Here. 

This is a daily chart of the euro US dollar pair, which by weighted volume is the largest component of the US dollar index. Therefore, it is more likely to be a larger contributing factor to the directional bias of the dollar index.  

Here we have a classic bull run, followed by a period of consolidation, with a continuation bull run, to a high of 1.23, during the beginning of 2021, and where price action has breached the bull run’s resistance line as highlighted and is falling back to just below 1.21 at the time of writing. This is lending itself to the general strength of the US dollar when simultaneously combined with the actions of cable.

And so, although Joe Biden’s covid relief stimulus package would appear to be a pivotal point in the acceleration in the US dollar strength, there are other things to consider, such as multi-month highs, as shown with cable and the Eurodollar pair.  

We also have to factor in the fact that the dollar index failed to breach the 89.00 key level, where the previous high going back to the beginning of the pandemic was 103.00, a hefty grabbing for the dollar, and where traders will always be eying the tops and bottoms of huge moves while looking for turning points.

Traders always expect volatility when there is a change of president, and even more so when there is a change in party, such as in this case where are the outgoing republicans will be replaced by the Democratic party’s polities. The next stage will be waiting to see if the outgoing party’s policies are replaced and, if so, what this might mean for the financial markets.  

Categories
Forex Course

158. Where to Find Authentic Forex News and Market Data?

Introduction

Introduction

Introduction

Fundamental analysis is an integrated part of forex trading. It provides an exact logic and reason behind the movement of a currency pair. However, the fundamental analysis depends on several fundamental releases and news. Therefore, it is evident for a trader to know the source of this news.

What is Forex News and Market Data?

Forex news is economic, geopolitical, and financial news that may directly affect the price of a currency pair. Moreover, fundamental data are economic releases that show the current and upcoming economic conditions of a country.

The price of currency pairs depends on many factors, and traders evaluate it to anticipate the market movement. For example, if a country achieved its targeted inflation rate, and the central bank raised the interest rate, it will indicate stronger economic conditions that may influence traders to take traders in a specific direction.

However, it is essential to find the source where the forex news and market data are available.

Where to Find Forex News and Market Data

Forex trading becomes very easy nowadays as most economic news and market data are available on the internet as soon as it releases. Therefore, forex trading becomes very attractive to retail traders as they can operate all their activities from home with a computer and a stable internet connection.

Let’s have a look where we can find this information:

Forex Brokers

Many forex brokers provide integrated market news and an economic calendar where the upcoming economic releases and events are scheduled. It will update as soon as the news comes and will provide historical data. Some brokers provide exclusive technical and fundamental analysis based on forex news and market data, which is also helpful for traders.

News Portal

Besides the forex broker, there are many websites where forex economic calendar and events are released. It also provides technical and fundamental analysis based on the available information. However, some trading portals offer live charts with economic data.

Image Source: www.forexfactory.com

Forex Indicator

Besides the MT4 and MT5 trading platform’s stock indicator, several custom-based indicators show the upcoming news in a box within the price chart. When the news comes, it shows the result immediately on the chart. On the other hand, MT4 and MT5 have a built-in economic and fundamental news service, which is very useful.

Conclusion

It is not very hard to find forex news and market data as it is available publicly, and anyone can access it. However, the challenging part is getting the news immediately after release. The news’s timing may differ based on the quality of the internet connection and execution speed of the news providing website.

[wp_quiz id=”86437″]
Categories
Forex Basics

Trading Forex Without Monitoring the News 24/7

One of the biggest fallacies that traders will encounter when they start trading with Forex is the fact that “news is vitally important”. While news stories do impact financial markets, I think it’s more important to ask this question: “What matters most, why does a market move, or the fact that it does?”

One of the biggest fallacies that traders will encounter when they start trading with Forex is the fact that “news is vitally important”. While news stories do impact financial markets, I think it’s more important to ask this question: “What matters most, why does a market move, or the fact that it does?”

One of the biggest fallacies that traders will encounter when they start trading with Forex is the fact that “news is vitally important”. While news stories do impact financial markets, I think it’s more important to ask this question: “What matters most, why does a market move, or the fact that it does?”

When I started trading, I was constantly looking for the reasons why the currency pair moves in one direction or another. I would have a trade and the market would work against me. I would take some kind of loss and then look for a reason for what happened. Too often, I can find someone on one of the forums or news sites that tell me that “Currency A fell because of the economic numbers that came out overnight”. While this might be true, in the end, it doesn’t matter why it happened. It only matters that it did. Forex trading without seeing the news

Once I began to focus on the WHAT or WHY of a movement, I began to realize that understanding what led to the currency pair in one direction or another was completely irrelevant. What I needed to understand is that, in fact, we broke the support, the resistance, a trend line, or an exponential moving average. It doesn’t really matter what caused it to happen, what mattered is that we have now surpassed that level and the discussion has already taken place. If my trade stopped, I am indeed in the wrong with this equation.

You can always question the market as long as you want about how bad you are, but it’s a great way to lose a lot of money. Too many people worry about whether the market has it right or not. Personally, I know a couple of traders who went bankrupt during the financial crisis a decade ago. They would still be arguing with me about how “this ridiculous drop in stock markets cannot last forever”. In the end, they were right. However, that ridiculous fall lasted long enough to eliminate them financially.

In an even clearer example of how little WHY a market moves in one direction rather than the simple fact that it did, I remember that a pseudo-famous and promising Forex instructor during 2006 was crushed for trying to reduce the USD/JPY pair. His argument was that the money would go back to Japan based on a security trade, an argument that was finally right. Unfortunately for him, he began to shorten that pair of currencies about six months ahead of time. To put us on the worst side, I was so convinced that right that he kept shortening it. He ended up blowing up his account. Even though I was right from an esoteric point of view, the reality is that the pair was going up all that time. In a situation like the one commented, it can be a success, or it can be profitable. It’s your choice.

Anyway, you don’t get the news fast enough. This drives me crazy. When I started trading 13 years ago, many people were involved in news trading. There is a scenario in the world of Forex where I could take advantage of news ads, but algorithmic traders and the machines that have entered the Forex world have tried to exchange economic news when it is launched into the market. There are now programs that analyze news sources for headlines and perform keyword-based trades. Not only is your news supply much slower than you pay thousands of dollars a month, but your running speed is also much slower and the size of your account is not large enough to move the market.

This is not to say that news cannot come into play with its analysis, but it must observe it from a longer-term angle. Let’s take an example, if we have warned of several negative economic announcements outside Canada recently, then you may think that the Canadian dollar is going to be bearish. That’s okay, but that doesn’t necessarily mean I press the sell button right away. What this means is that it has it in as an underlying bullish potential currency. This is what news websites are so good, adding news for the long-term movement. The next five minutes are almost impossible to guess what will happen based on a headline. Liquidity becomes a problem and, of course, machines have made thousands of transactions by the time you even press the button.

Beyond that, I didn’t get into Forex trading to become an economist. Frankly, it’s a little ironic that I’m an analyst. However, the only thing I think you should bear in mind is that we are here to trade and make a profit. It doesn’t really matter why we’re making money, only we are. That’s why there are so many different strategies out there, with such different results from person to person. Because of this, I think what we’re looking at is finding something that’s technically simple for you to follow, and something that you’re willing to follow. In other words, if you get a sales signal, just take it. That doesn’t mean you can’t study the news to observe whether or not a major ad is being published that might cause problems, but you’re there is no spreadsheet trying to guess how many moving pieces are going to move. push the markets around.

Frankly, it’s almost impossible to take all that information to make a good forecast of where a couple of currencies go anyway. This is because there are several competing elements and, of course, competing reasons for people to pass a long or short pair anyway. If we break the resistance, then we go higher. If we break the support, then we’re going down. Why is it really important? Or would you rather trade and have a little profit?