One of the basic skills of a successful trader is fundamental analysis. The experts define the primary purpose of this analytical method as tracking the factors that determine the movement of prices in the market. E. g., currency value in Forex depends on supply and demand. These parameters are influenced by the economic indicators of an appropriate state, the political situation in this country, wars, pandemics, as well as many other factors. Sometimes, even weather conditions (floods, tsunamis, etc.) can affect the value of an asset.
Thus, when conducting a successful fundamental analysis, it’s important to receive timely updates on what is happening worldwide and conclusions about the possible impact of incidents on the markets. Traders mainly apply the Forex economic calendar to obtain this information. Many online brokers publish dates that are significant for the dealers. But the Forex specialists recommend using the data only on trusted websites (e. g., fbs.com).
Key Features of the Forex Economic Calendar
Such a list usually involves periodic reports of various agencies, companies, departments, and so forth. Furthermore, the economic calendar commonly contains press releases of central banks as well as other budget institutions. Moreover, the described table involves information about planned events that aren’t regular but can affect the markets. For example, it may be congressional hearings, politicians’ speeches, meetings of state heads, or significant political procedures (such as elections).
What Does Information from the Forex Economic Calendar Effect?
The events from such a table may cause bursts of volatility, increasing the risk of investments. Therefore, knowing in advance about the planned arrangements, traders can:
- adjust the portfolios in line with their investment goals;
- predict with sufficient accuracy the response of certain assets (e. g., commodities or currencies) for specific economic releases;
- create more effective or improve existing Forex trading strategies.
All the described features help to get the maximum profit as well as minimize risks when trading on the currency exchange.
Filtering Data in the Forex Economic Calendar
Traders may choose the currency pair they’re interested in, weed out events by it, and specify the time during which they desire to view news on the selected pair. The calendar gives statistics not only for current dates but additionally for past periods. Thus, the dealers can filter events according to a specific time. Nay, the described list on some trading platforms makes it possible to weed out the important economic news according to the following:
- name of the company to which these publications relate;
- level of expected impact from the events they describe;
- country to which the news refers.
Reputable Forex brokers (e. g., FBS) offer detailed instructions on how to use the economic calendar. That’s why even novice traders often have no problems applying the table described.
The Efficiency of Using the Forex Economic Calendar
The information in the list is ranked according to the influence of the posted news on the market. When assessing the importance of an event, significant economic indicators are applied. Among the most critical parameters, the US Treasury Yield Curve, GDP, as well as Unemployment and Interest Rates are worth noting. For example, the first one helped to predict eight huge recessions of the past years.
Let’s look at a more specific example of the efficiency of the Forex economic calendar. After the announcement of the information that the US Federal Reserve would raise interest rates on September 26, 2018, the dollar was sold out two weeks before the date of the scheduled event. It’s because the central banks often announce growth or decrease interest rates long before such decisions are made. If traders miss such data and underestimate its significance, they can lose a lot of money.
Review What Is a Forex Economic Calendar?.