What exactly is the forex calendar?
This calendar is also referred to as the economic calendar contains all the dates to remember and the announcements that concern political or economic future that can possibly impact the market. Any good trader should know how to use this irreplaceable tool for trading especially due to the fact that it can give a warning regarding advertisements that can possibly or potentially enhance or deter the market operations. For foreign exchange, one cannot simply live without it. All kinds of news – be it political or economic, can have an impact on all market forces. However, it takes a lot of effort to learn how to read, make sense of and profit from this economic tool.
How is the forex calendar used?
Economic calendars are used in forex to keep a trader guided. Most of these calendars are in tabulated forms which show a particular date being studied alongside with the indicator or new economic that is involved in that particular time frame. Each ‘new economic’ comes with an explanation or a brief description together with the previous value noted. A lot of technical analysis should be applied in order to effectively use a forex economic calendar. Each calendar contains a wide array of economic indicators each of which has a lasting effect on the actual trading.
What are the most important economic indicators that are presented by the forex calendar?
With the vast number of economic indicators presented, a discerning trader should understand the fact that some are more important than others. Depending on the currency pair that you choose to deal with, you will know which indicators affect you the most. But in general, given that the center of economic power now lies in the USA, Asia, and Europe, you might also have the impression that the following can be considered as the most important categories of indicators:
Interest rate indicators: These help in explaining the largest movements in the forex market. In general, interest rate indicators will explain the correlations between and among modification, currency, and volatility of any given pair.
Consumer Price Index: The CPI is one of the indicators that you should always watch out for in your forex calendar. For one, it helps in the assessment of the occurrence of inflation in any given economy. It is also an important parameter that directly affects the processes of job creation, wage increase that deeply affects a large portion of the population.
Sales on retails: This indicator aids in the assessment of the consumer behavior’s strength as well as the stability of the retail trade. This helps point out the occurrence of indicator evolution.
Gross Domestic Product: GDP is definitely one of the most essential indicators in the entire economic activity. It represents a country’s total production value within a period of one year.
Is it possible to trade the economic news as presented in the forex calendar?
This is one of the questions usually asked by beginners. This is perceived as a venue for the creation of large profits given that you have the innate capability of anticipating which are considered to be the best sources of large income on the part of the trader. Easy as it may seem, any trader should still proceed with due caution given that the market forces do not always act according to expectations.