To properly define a Forex calendar, consider the following: You hold a planner, and it lists important events in your life. These include anniversaries, birthdays, other special occasions, and more. There is a calendar in the planner that lists the holidays for the year. You also have notes on appointments you need to attend on specific days and other things you need to do.
In the Forex or economic calendar, the holidays and special events in your life represent what is happening in the forex market. The appointments and other to-dos you list are the actions you plan to take in response to those events.
Based on the analogy provided above, the Forex calendar is considered a tool known to traders. Information such as unemployment, government reports, trade balances, and consumer report indices are some of the things that make businessmen aware when using the economic calendar. However, unlike the annual calendars we have, the economic calendar only covers a limited scope and even offers market events at specific times of the day.
Because the forex calendar can provide traders with useful information, they usually build on it to sneak in from time to time and make profitable trades. While all market indicators are considered volatile, using an economic calendar can provide traders with information about stability, so they are ready to trade when all indicators stabilize.
Sometimes, when the market is stable, the opposite is true, and seemingly isolated market events can cause the market to become active. In this case, the economic calendar can also be used to predict future trends in Forex.
In addition to report-related information, the Forex Calendar also provides users with the latest news in the Forex market and the entire world economy. Sometimes news comes with an alert. These functions depend on the provider of the calendar. Some users set up accounts online to view the economic calendar. Some of them receive it by email every day.
Along with the calendar, users receive news feeds and Forex-related updates. Traders will find these feeds useful as they can also stay up to date on global markets and see how these trends affect Forex trading based on events.
Although the Forex Calendar is considered a silver platter for traders, it will not help if the trader does not properly understand the information provided by the calendar. Some traders wait until they establish patterns based on these activities before taking action. Some people use the calendar information they have and analyze their charts to see if that information matches the chart indicators.
The principle of desirability is that there is consistency in how to chart indicators, calendar information, and the type of analysis employed to work together to establish entry and exit points. This means that traders should make sure they fully understand what is going on so that the information can be turned into profit.
Benefits of Forex Calendar
Just like the calendar you use at home, the Forex Calendar is a customized tool that provides information specifically about Forex. If you’re new to this tool, consider why you didn’t miss a very important appointment the other day because your calendar reminds you of the day of the week. The same goes for the foreign exchange or economic calendar.
They don’t just tell you about your day in a different world market today. The economic calendar also gives you useful information about how the economy is functioning, the current value of a currency, and what specific events could push that value up or down at any time. Here are some of the benefits traders can enjoy when using the economic calendar.
It prepares you for action. The Forex Calendar is a communication medium. Since the type of information you will get is specific to Forex, you don’t need to worry about finding the specific information you need to start trading.
In addition to this, the peculiarities of the information economy calendar vary from hourly to daily. This means that you can get a good idea of the state of the foreign exchange market based on the most recent information.
It makes you take no action. The Forex calendar doesn’t just highlight good news. The tool also helps tell you when adverse events are likely to occur. Although forecasts are largely hypothetical in nature, the direction of a currency often indicates whether a particular market is falling. This means that if the indicator is only favorable, then you don’t need to take a risky trade.
It prepares you for Plan B. Contingency plans can be made through the Forex Calendar. This is especially useful when you get information that lets you know how a particular economy is doing in a particular country. If you have several currencies to trade, you can focus on currency pairs that are not too risky.
At times, all currencies seem to depreciate, but not all currencies depreciate by the same amount. If all indicators are unsatisfactory, relying heavily on your judgment of whether you take the least risk, you can always resort to a currency pair that gives you the chance of least loss and least profit.
As you can see from the list provided above, the Forex Calendar can serve as a tool for you to decide whether to trade. However, you must keep in mind that your knowledge of various indicators and forex trading strategies is still important for trading.
Relying solely on the Forex calendar will not help determine your success as a trader. Know that even professional traders continue to develop other skills to make them better. In this regard, it is still advisable to be aware of other factors that contribute to volatility in the foreign exchange market.