Economic forex calendar: how to use?

Published: August 18, 2022 Updated: September 28, 2022


Many professional traders use technical chart analysis in their trading practice as one of the most effective methods of price forecasting. However, in many cases the calendar of economic news is also used. Its main purpose is to keep track of events in the world economy in order to be able to make price forecasts. forex market.

Opinion of an expert

The economic calendar remains one of the main tools of market analysis and is an essential part of the fundamental understanding of what is happening in the market. In simple terms, the economic calendar is a summary of the main news and analytical data that reflect the current economic situation in different countries around the world. In turn, a clear understanding of the economic conditions of a country makes it possible to assess the long-term prospects of the national stock market and national currency.

It is worth noting that macroeconomic statistics provide the most complete fundamental picture of what is happening in the country and allows you to draw conclusions about the overbought or oversold nature of the regional currency, as well as whether to invest in the corporate sector of the region at all, if, for example, the economy is in crisis or is in recession. Since fundamental news has the most direct influence on market trends, every trader and investor should consider the possibility of such influence in the process of trading. This is necessary to ensure that a sudden powerful movement in the market does not become a surprise and always remains only an acceptable risk. This is why it is so important to follow the economic calendar, and know which events or reports can be a source of increased volatility today.

Artem Deev The head of the analytical department of the brokerage company Amarkets, as well as a trader and expert in the Forex and CFD markets:www.amarkets.site

Calendar structure

In the screenshot, we see a panel on investing.com, which indicates the news for yesterday, today, tomorrow, this week and next week. That is, these tabs show events that have happened, are happening now, or will happen in the future.

The interface is easy to understand. The date, then the time and country for which the news is released is indicated. Or it can be a country holiday due to holidays, etc., when there is no news or trade.

Next we see the name of the news. There are three more columns in the upper right, which show preliminary data (pre), predicted and actual data (fact), which will be displayed directly at the time of the event's release. Red or green indicates positive or negative news for currency pairs. Before proceeding to the incoming data analysis, you can still customize the calendar individually. Press the "Filters" button and additional settings will open, where you can select any country whose news we are interested in. You can specify the importance of events: 3 stars very important news, 2 average importance and 1 star - this is data which may not cause serious price fluctuations for any currency pairs. It is usually recommended that news with one star be deactivated.

How to read the calendar data correctly?

See the screenshot for the time of the next important news release at 12:00, Euro, high importance, how the event is called, preliminary and predicted data. The actual ones will be shown at 12:00.

What does this data give to a trader? At 12:00 p.m., an impulsive price movement is possible, for example, it may be the forex dollar rate. If the predicted value coincides with the actual one, there may be no impulse. Market participants expect the value of 8.9%, in case the actual data as a result of the event will be very different from the forecast, then there will be a strong volatility in the market.

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The calendar may contain news that are related to some speeches. The screenshot shows the news: the speech of an FOMC member. As a rule, there will be no forecast or preliminary or actual data in such events.

Here we should expect a price movement based on this speech. Everything here can depend on the speech, perhaps he will misspell or say something positive or vice versa. Depending on this the market will move in one direction or the other. Further, if we are interested in the details of a particular news, we can see the details by simply clicking on it:

There will be a description of the event, there is a graph-report for a long period of time, where you can see how the dynamics of the results of this news. You can see the prospect of price movement in the near future. With the right approach forex economic calendar can give the trader all the necessary information for analysis. It is also worth paying attention to such option as "Official discount rate".

This shows when the major central banks will be updating rates. This is also considered important economic news, which can significantly affect, at least in the medium term, the schedule of price movements in the forex market for a particular currency pair. Basically, many sites provide quite detailed economic calendars so that the trader can profitably build his trading plan for the day as well as for a week or even for the next month.

Conclusion

A knowledgeable trader must be aware of what events are coming on the market. In order to understand for what reason the price moves in one or the other side, it is necessary to know a clear schedule of news releases. Of course, the economic calendar is not a panacea and none of them can guarantee the price direction, determine the trend, etc. This is just one of the tools of a successful forex trader, which, coupled with an understanding of technical analysis, will bear fruit.

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