The Forex Factory calendar is an essential tool for forex traders. It provides a comprehensive overview of all the important economic events and releases that can impact the currency market. Traders can use this calendar to plan their trading strategies, identify potential trading opportunities, and manage their risk effectively. To make the most of the Forex Factory calendar, it is important to understand the various indicators that are used to categorize and rate the news events. In this article, we will discuss the top 5 Forex Factory calendar indicators that you need to know.
1. Impact Indicator:
The impact indicator is one of the most important features of the Forex Factory calendar. It categorizes the economic events based on their potential impact on the market. The impact is classified into three levels: high, medium, and low. High impact events are the ones that have the highest potential to move the market significantly. Medium impact events can have a moderate impact on the market, while low impact events are those that are unlikely to cause significant market movements. Traders should pay close attention to high impact events as they can create volatility and trading opportunities.
2. Actual, Forecast, and Previous:
The actual, forecast, and previous values are three important pieces of information provided in the Forex Factory calendar. The actual value represents the actual result of the economic event, while the forecast value represents the consensus estimate or expectation of market participants. The previous value represents the actual result of the previous release of the same economic indicator. By comparing the actual value with the forecast and previous values, traders can gauge the market sentiment and assess the impact of the economic event on the currency pairs they are trading.
3. Time Zone:
The Forex Factory calendar displays the economic events according to the time zone of the user. This feature is particularly useful for traders who trade multiple currency pairs and need to keep track of events happening in different time zones. By adjusting the time zone settings, traders can ensure that they do not miss out on important events that can affect their trading decisions.
4. Currency Filter:
The currency filter is a powerful tool that allows traders to customize the Forex Factory calendar according to their trading preferences. Traders can select specific currency pairs and filter out the events that are not relevant to their trading strategy. This feature enables traders to focus on the events that directly impact the currency pairs they are trading, thus avoiding information overload and improving their decision-making process.
5. Volatility Filter:
The volatility filter is an advanced feature of the Forex Factory calendar that allows traders to filter out events based on their expected impact on market volatility. Traders can select the desired level of volatility, ranging from low to high, and the calendar will display only the events that meet the selected criteria. This feature is particularly useful for traders who prefer to trade during high volatility periods or avoid trading during low volatility periods.
In conclusion, the Forex Factory calendar is an indispensable tool for forex traders. By understanding and utilizing the various indicators provided by the calendar, traders can stay informed about the important economic events and releases, plan their trading strategies effectively, and make informed trading decisions. The impact indicator, actual, forecast, and previous values, time zone, currency filter, and volatility filter are some of the key features that traders need to know and use to maximize the benefits of the Forex Factory calendar.