When it comes to Forex trading, there are several risks that a trader is undertaking at a given point in time. The market is constantly changing, resulting in a profit for one trader but a loss for another. Therefore, traders now utilise an economic calendar to make the process of forex trading somewhat predictable.
What is an Economic Calendar?
An economic calendar is essentially a list of all the important upcoming events that may have an impact on the forex market. The events tend to form the basis of an individual’s fundamental analysis. Traders will keep track of events like GDP, Consumer Price Index or CPI, and more in real-time if they use the forex economic calendar live. This calendar will keep track of the days on which major economic news will be declared concerning certain economies.
Using a Forex Economic Calendar
As a beginner in trading, one must use the real-time economic calendar to decide on which days they will be trading. To choose an event, one has to keep in mind that price movements and volatility on a given day are high. On these days, a trader must look to place the stop loss at a value that mitigates the most risk.
This is because choosing a highly volatile event will mean that the following scenarios could take place:
- The price increases in one direction and then plummets after a while resulting in a zig-zag pattern.
- The price displays a steep incline which later subsides and continues moving upwards again.
- Prices can also show a steep decline, plateaus for a brief moment, and decrease again.
How to Read a Forex Economic Calendar?
Reading a Forex Economic Calendar live will help to maximise one’s profits before and after a major announcement.
Special attention is given to announcements affecting major economies as they can bring in the most profits as well as devastating losses. To filter the information one obtains from the calendar, one can also customize it.
Daily Real-Time Forex Economic Calendar
Traders can customize their calendars according to the desired day. One can choose to set the date to the present day or even the next seven days. However, the change must take place according to the timezone that one is most familiar with.
In addition to this, a trader also has a choice to choose the currency they want to trade with and pin the important events that they wish to keep track of. Thus, the Forex Economic Calendar allows one to focus on the state of the market daily.
Important Items to Look For in a Forex Economic Calendar
The most common one that traders notice is the interest rate decisions put forward by the central bank.
- The Consumer Price Index is another announcement that has an influential effect on forex trading.
- The Gross Domestic Product or GDP indicators can influence the exchange rate.
- The US Non-Farm Payrolls represent the number of jobs added and so on. It affects the US dollar.
- The Produce Price Index is the average change in the price provided by producers.
There are many other minor events as well.
Trading with a Forex Economic Calendar
On the basis of the impact that the event will have on the currencies, the events are marked as follows:
These represent the more important events like GDP, Unemployment Rate, Non-Farm Payroll numbers, and more, along with interest rate decisions.
Events like the retail sales, trade balance, and typical household spending data are placed in this category.
This includes low impact events like minor bond sales, results of surveys, and more.
Therefore, the Live Forex Economic Calendar is a crucial tool that can help one make the right decisions at a given time. A trader can thus maximize their profits by making informed decisions.