Using the Economic Calendar to Improve Forex Trading Skills
An economic calendar is frequently used by traders to track market-moving indicators, including interest rates, balance sheets, economic news releases and policy changes. Market-moving indicators, which are usually issued or reported in a press release, have a very high probability of affecting the foreign exchange markets. By monitoring currency prices, one can learn which currencies are increasing in value and which are decreasing. This form of technical analysis is very useful for traders who need a quick overview of market developments.
Economic news releases are released periodically to provide investors with up-to-date information on economic developments around the world. The timing and frequency of release vary by country. For example, some economic calendars feature releases daily while others are released weekly. Some news release services also provide data on global economics from several countries at once.
The key to being a successful trader depends on how well an investor knows his/her charting technique. Economic calendars help the trader to understand the major influences on the markets. As a trader, you must always be prepared to evaluate new developments on the market. Economic news releases and related data are among the best resources that you can use to assess the performance of the markets.
Another major advantage of the economic calendar is that it gives traders a clear picture of the upcoming map. The release of this calendar provides the data needed by traders to make informed decisions regarding the exchange rates. By knowing the official release date, traders can analyze the strength or weakness of the currencies, depending on the country’s current account deficit. Forex traders should therefore be aware of the scheduled release date so that they can plan their trading activities in accordance with the economic situation.
An economic calendar can have two main uses for traders. One is to give them enough time to plan their trades and the other is to let them know of any scheduled events. For example, traders may need to evaluate the impact of interest rate changes on the national interest rate. In order to do this, the traders need to know when rates will end either higher or lower compared to current market rates. Important economic data such as employment figures may also influence the release of the calendar, so it is necessary for traders to stay abreast with the latest information in order to plan their trades.
Economic calendars are usually released monthly. Traders who do not have access to these monthly release can purchase a hard copy from the website of the National Bureau of Economic Research (NBER). This calendar has all the important economic events that happen around the world. Traders who visit the website may then enter the data into the calendar based on the date and time indicated. This allows them to easily track the past price movements and gain trading advantages accordingly.
Although there are some risks involved in predicting future financial events through a calendar, however, it is easy to understand the concept behind it and how it may affect trading activities. For instance, traders may be able to read what the central banks of different countries have planned to do based on the calendar. They may also be able to determine what political events may affect currency rates. Other factors that may affect currency rates are weather and pollution. In addition to predicting how the market may move, traders can use the calendar to prepare for future goals.
The key to successful trading in the Forex market lies in being able to understand the different indicators used in the economic calendar. The release of these indicators help the trader predict what currency pairs he should buy and sell. Once a trader can predict the direction of the price, he may then be able to establish his entry and exit points. Once the price reaches these points, he can then exit the trade and make a profit if the trade was successful.