Trading these days requires much more from a trader than just the general concept of making instant decisions. It demands that a trader should be a good analyst; he should have a keen eye and diverse interests. To be a good analyst one must focus on the economic situation and remain updated with the latest market trends. A trader’s knowledge and insight is the ultimate key to triumph in this business.
Economic Calendar of the forex market is a quick and reliable source to collect news about the global market conditions. Economic calendar can be very helpful if you are looking for a good raise in your profits.
Features of the Economic Calendar
The economic calendar has a lot of helpful features; it keeps a history of all the information and also ranks the economic events according to their time of occurrence, their importance and their weight on the market. Not only this, it also contains the forecasts of analysts and professionals. Usually before the opening of the trading week, an online calendar is also published. The data and events are constantly adjusted according to the current situation. The best way to utilize this calendar is at the time of publication. New and fresh information can be of real use in forex trading.
The calendar has another very beautiful feature that it warns you of the upcoming news in advance. So in case some news is going to be released, you can close your open positions or get as much profit as possible in that time.
How to use the Economic Calendar
This is how you can utilize the economic calendar for your trading benefit. Every event announced in the calendar holds three meanings; the event itself, its forecast, and the previous meaning. Basically, it tells you the deviation of the event based on the analytical predictions and consensus and also uses the facts from the previous such events for traders to anticipate movements in the foreign exchange market.
The market will have a mild reaction or it will be absent altogether if the forecast is justified by the predicted values. However if the forecast does not coincide with the calculated values, the market reaction will be strong. The strength of market reaction will depend on the amount of difference between the actual and the forecasted data. If the currency output turns out to be better than the expected value, it calls for a buy order. Similarly, if the output is worse than expected, you should consider sell option. It would be a rare event that actual and forecasted outputs match, but in such a case neutral trading is recommended.
Non-farm payroll numbers, gross domestic product (GDP), consumer price index (CPI) and interest rates are some of the major significant events which can be anticipated with the help of economic calendar.
An economic calendar is offered by almost all financial resources. These calendars may differ in their design, settings and features but it is vital that the calendars are constantly updated and they have clear, complete and relevant facts. Also, it would be nice if they have good visual and functional features for better user experience.
The whole purpose of economic calendar is to have easy access to economic information but it would be useless if you do not know how to analyze this information. You should have a complete understanding of the psychology of forex market if you wish to succeed in this business.