Traders who are trading in Forex understand the movement of the market. It is one of the financial markets which recognized for its movement. This is why, if you are trading in FX, you must do analysis on both technical and fundamental levels. These certain movement has occurred because of major economic-events, launched reports, and other financial events which you need to get familiar with. But, the issue is, there are plenty of ever-changing events and latest launches to keep track on. The result, it becomes difficult to stay up-to-date.
That’s where an economic calendar comes; to give full details on all the latest economic and financial happenings occurring across the world. If you are not aware of it then think of it as an important asset of yours in FX trading.
An economic calendar is also known as Forex calendar and holds so much value for FX traders. It is because of its all-in-one nature where you can have access to all latest events and launches information. If you are planning to see one, then you can get it online. There are many providers who offer the services of the economic calendar online for investors and traders.
If you haven’t seen one then you can check out the economic calendar offered by Advisorymandi. But, going through the economic calendar won’t be enough to understand the market.
If you don’t know how to interpret it then it won’t do any good. This is why you need to know how to read the economic calendar so that you can take the informed decisions regarding your trading and investments.
Let’s break it down for you.
How to Use the Economic Calendar?
As you can see in the figure below, days are located in the header is set in chronological order as Yesterday, Today, Tomorrow, and so on. The first column at the extreme left corner represents the time of the data released. When the new data launch, it will automatically update in the economic calendar. Next to it is showing how much time has left for that particular event to finish.
Next is the “Currency” column, if you see closely, you will find out that there is a flag and some alphabets are mentioned in the data. The flag indicates the country and next to it is the currency of that particular country.
This currency indicates the economy of that particular country mentioned in the data released.
The economic calendar we have explained here isn’t limited to the Forex traders but can be useful for equity traders and commodity investors as well. Next column is “Impact” which indicates the volatility as an indicator. This shows the impact on a particular currency.
If you see closely, you will find out that there are multiple colors in the impact column. Well, there are three colors indicating the different behavior of impact on the respective currency.
“Yellow,” tells there may or not be a mild impact on the currency. “Orange,” tells the probability of change in the future in respect to forecasted and actual value. However, “Red” indicates that the market experts are expecting to have a data move in the FX market.
Last, the three number columns – Previous, Actual, and Forecast.
“Previous” represents the data released last time. It could be a day, week, or month. “Forecast” represents the outcome expected by experts and “Actual” is actual.
Final Thoughts: -
Once you get used to of this, you will be able to predict the direction of the market. That’s why Forex traders use the economic calendar to compare two economics and take informed decisions after analyzing the situation as per latest news.