A modern trader is not just a market fighter; first of all, he is a dedicated analyst with diverse interests. And there is nothing more important than information for the analyst. Professional traders are interested in almost everything about the world economy: from the prices for retail goods and presidential elections to the hostilities and natural disasters. You need to see, hear, read and realize on time everything, that can affect the financial market.
The economic calendar
The economic calendar of the Forex market allows you to collect together all the important global financial news practically at the time of publication. Wherein, the calendar not only keeps the real news, but also ranks them in order of importance and power of influence on the market – everything you need for analysis and successful Forex trading. The history of the economic data and forecasts of analysts are stored there as well. Usually, an online calendar is published before the opening of the trading week, and the output of the main regular data is planned in advance for a period of several months and is constantly adjusted in accordance with the current situation..
Here's how to use an economic calendar for trading: each announced economic event has at least three meanings: the event, the consensus (forecast) and the previous meaning. Exactly the deviation of the event, firstly – from the analytical prediction, secondly, from previous data that can be adjusted relative to the release of the previous period is valued.
If the forecast by the fact of publication is justified, i.e. coincides with the calculated (predicted) values, the market reaction will often be mild or be absent at all. If actual data differs from the forecast, the market gives a sharp speculative shot, and the greater the difference, the stronger this reaction is. Global news: international events, statements and press conferences of the key figures of the financial market, the statistics of the leading countries provide an effective response practically on all the trading instruments.
When the news comes out better than expected (for a country's currency output), it is usually recommended to open a buy order, if worse than forecast – a sell one. If the values match (it's rare but it happens!) – keep trading neutral.
If the trader knows the time of the news beforehand, he can plan his activities. In particular, the moments of entering the market or closing the position. The principle of "buy the rumor, sell the news" in practice means that the market starts to respond to the information in advance, and at the time of publication may go in the opposite direction, forming a speculative market "spike". Everything happens within a few minutes and such situation is extremely dangerous for small deposits. The economic calendar warns when the news will be released in advance, and allows to close the already opened positions in time. Or conversely, to try to squeeze a profit from a quick movement, if the trader is open to a greater risk.
Every financial resource offers an economic calendar, which can be with different design and functional content. However, there are some signs, which characterize quality calendars:
...the economic calendar will be a helpful guide for you on your road to profits...
First of all, the Forex economic calendar must be complete, relevant and constantly updated, with direct access to news sources.
The interface must be understandable, visually and functionally, without advertising tricks and other irritating elements.
Software implementation of the calendar must support a logical system of various filters for information with the ability to save the settings in personal profile of each user.
Finally, to summarize the above: always seek to understand what news mean for the market in general and specifically for your trading instrument, analyze historical data, consider the psychology of the market behavior of the crowd at the time of the news release and then the economic calendar will be helpful fellow guide for you on your road to profits.