Economic calendar forex factory is a familiar tool for Forex trading investors. However, for new investors, not everyone knows about this tool and how to use it. Therefore, in this article,Learn Forex Trading will provide detailed instructions on how to use the forexfactory economic calendar tool.
General information about Economic calendar forex factory
The economic calendar is a constantly updated dashboard of important events. Upcoming events in chronological order, affect the foreign exchange market. To help traders predict potential price behavior.
Forex Factory was founded and managed by Fair Economy, Inc. Here we specialize in providing several financial information services. Aim to create a forum dedicated to the trading community.
Economic calendar forex factory is considered a valuable source of information in the financial sector. With tools such as economic calendar, news, and information about exchanges (brokers). It has become an indispensable resource for every trader.
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What is the concept of an Economic calendar forex factory?
Economic calendar forex factory is an online tool that provides information about important economic events. Economic indicators are coming soon in the financial markets. Especially in the foreign exchange market (Forex). This tool helps traders keep track of the calendar of important economic events. Examples include the release of employment data, interest rates, and other announcements. This information can affect the prices of currency pairs.
Through the ForexFactory economic calendar, users can track times, dates, and economic events. As well as forecasts and their expected impact on the market. This information helps traders better understand the causes of price fluctuations. From there, they can adjust their trading strategies based on the latest economic data.
In addition, investors can learn more about economic calendar investing to improve their trading efficiency.
Why is the forex factory calendar important to traders?
In the field of Forex trading, there are three main schools that users participate in. This includes technical traders, fundamental traders, and those who trade in between. The economic calendar plays an important role in all three cases. With technical methods, the economic calendar helps predict the direction of price movements. Fundamentalists use the economic calendar to evaluate the probability of success for a trade.
The Forex factory economic calendar is an important tool to help investors optimize profit opportunities. At the same time, reduces risks when important events occur. Event risk is unpredictable and can change the market. Even the best forex indicators do not protect against event risk. An important tip is knowing how to read the economic calendar.
Traders often use the economic calendar to predict trends and find profit opportunities. It is important to read and understand it to use the economic calendar effectively.
How to read forex news about Economic calendar forex factory
The market reflects future values through the Economic calendar forex factory. Economic growth often strengthens the currency. While decline leads to its weakness. Actual data versus forecasts determine the future value of a currency. The economic calendar helps traders keep up to date with important events. With an economic index and three main columns: advance reading, forecast, and actual reading. Actual data that is better than forecast often increases currency prices and vice versa.
Except for some indicators like the unemployment rate, where lower figures are good. The large difference between forecast and reality strongly affects the market. Pre-read news is less important, but edits sometimes have a big impact when released. Thereby contributing to the news effect on the market.
Important types of Forex factory news
Four main factors influence global financial markets: Gross Domestic Product (GDP), Central Bank Interest Rates, Inflation Data, and Employment Data.
GDP evaluates the economic health of a country, determining whether it is in growth or recession. Growth rates matter, especially when comparing between countries, and affect exchange rates.
Inflation and the consumer price index (CPI) represent a country’s purchasing power. If growth does not surpass prices, it could hurt the people.
Unemployment data is an important indicator of the employment situation in the economy. Often yields more useful information about economic activity than GDP.
Interest rate announcements from central banks also have a significant influence. Low interest rates are usually good for economic growth, but there are exceptions.
The United States, as the world’s largest economy, has a strong impact on the global market. Any economic news about the United States has a major impact on other markets. Because this country is an economic power and has a great influence on global purchasing power.
Notes when reading the Economic calendar Forex factory
For day traders and scalpers, events marked in red on the forex factory economic calendar are the ones to pay attention to. Volatility around events is regular and expected. Regardless of whether the published data is above or below market expectations.
Traders understand that these events can create sharp swings. They may decide to withdraw or cancel the pending order to avoid pre-event impact. This action causes a decrease in liquidity before the event. At the same time, the price fluctuates rapidly before finding a stable direction.
In low-volatility markets, managing risk on each trade is important. This risk is calculated from the entry price to the stop loss price. Should be less than 2% of capital and preferably less than 1%.
Although a stop loss order usually helps to exit the trade at the expected price. However, in an environment with great impact, the possibility of price slippage is high. Even a 1% expected risk can result in a 5% loss.
With high-impact data, uncertainty is inevitable. Professional traders often close their positions before data is released. Avoid new transactions until the information has been published. This helps traders reduce risks and optimize trading opportunities.
How to use the Economic Calendar Forex factory effectively?
To use the Economic Calendar Forex factory effectively, you can take the following steps:
- Choose important events: Focus on events that are important and have the potential to have a strong impact on the foreign exchange market. This includes events such as interest rates, exchange rates, employment data, and GDP.
- Monitor previous, forecast, and actual data: Observe previous data, forecast, and actual data. Aim to evaluate the difference between expectations and reality.
- Read commentary and analysis: Read and analyze from other experts and investors. Identify important factors that the market can react to.
- Determine your trading strategy: Based on information from the economic calendar, determine your trading strategy before, during, or after the event.
- Control position size: Determine position size appropriate to your strategy and risk level. Avoid placing too many positions relative to your account size.
- Monitor the market before and after the event: Monitor the market before and after the event. Aim to identify new opportunities and risks.
By using the Economic Calendar Forex factory meticulously and thoroughly. You can make smart investment trading decisions. This helps optimize profit opportunities in the foreign exchange market.
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Why should users use the economic calendar for technical analysis?
Using the Economic Calendar Forex factory for technical analysis is a flexible and effective method. Especially in the field of forex investment and trading. Here are some reasons users should integrate the economic calendar into technical analysis:
- Learn about market events: The economic calendar provides information on important economic events such as interest rates, employment data, GDP, and others. This information may affect the market situation. At the same time, it also creates trading opportunities.
- Understand the causes of market fluctuations: Technical analysis often focuses on price charts and market trends. Using the forex factory economic calendar helps traders better understand the causes behind price movements. This helps them make decisions based on specific information.
- Forecasting large fluctuations: Major events are often accompanied by strong fluctuations in the market. By using an economic calendar, traders can forecast and prepare for these fluctuations. Thereby helping them manage risks effectively.
- Plan trading strategies: Incorporating the economic calendar into technical analysis helps traders plan trading strategies based on expected economic events. This helps them make smart decisions and place orders in a planned manner.
Conclude
The new article on Learn Forex Trading not only introduces the concept of the Economic Calendar Forex factory but also guides how to take advantage of the economic calendar to conduct transactions effectively. Wishing traders success on their path! Don’t forget to follow the page to update the latest information about the Forex, Stock, and Cryptocurrency markets.
Frequently asked questions
Why use the ForexFactory economic calendar?
Using the forex factory economic calendar helps traders predict and prepare for market fluctuations. This increases your ability to make smart and effective trading decisions.
What do the tick colors on the forex factory economic calendar mean?
Marker colors on the forex factory economic calendar often indicate the importance of the event. Events with high impact are often marked in red. Less impactful events can be highlighted in yellow or green.
How to read and understand information on the ForexFactory economic calendar?
To read the Forex factory economic calendar, you need to look at columns like “Previous”, “Forecast”, and “Actual”. Comparison between forecasts and actual data helps determine the impact of the event on the market.