A Guide to Financial Calendars
Tracking global events that could impact the exchange rate of the currency pair you are trading in is important if you are doing trades in the forex market. A financial calendar can help you keep track of these global events that move the market. Changes in GDP of the currencies you are trading in, interest rate decisions of these countries, consumer price index, etc. are some events that influence exchange rates.
While it is possible to make you own research for key future political and economic indicators and make your own calendar from them, you can find many reliable online platforms that offer financial calendars, and these calendars have indicators that are updated automatically at regular intervals. There are some financial calendars that highlight the importance of each indicator and this gives you which of them will likely move markets.
If you want to be successful in using these events to your advantage, then you not only need to know when they will occur, but you need to anticipate which direction that market will move as a result and why. While market movement can be unpredictable, being able to anticipate it can give you opportunities to have a successful trade. So, it is your decision whether to use these events or not in your trading but it is very important to know what these events will occur. Choosing a financial calendar should be your first task.
If you will look at all the macroeconomic indicators, you need to choose which the best one for you is. You should look first at the asset you are trading when looking at a financial calendar. The effect of certain indicators on currency pairs can be direct or indirect.
Following the type of trading you do is another consideration when choosing which indicator to follow. Buy-and-hold or intraday trader then there are different indicators to choose that affect the market temporarily or long-term. But some indicators affect both. The either bolster or hurt market sentiment short term and long term it affects the price. Price is affected by the direct correlation with inflation and reverse correlation with the exchange rate.
Regularly monitoring your financial calendar will help you follow trends better and it can benefit you if you spot a trend before the market does.
All the political and economic factors that can impact your current fair should be considered when using a financial calendar. While it is important to focus on specific announcements of events, what is more important is to keep the bigger picture in mind. So even if an event impacts a currency that you are in trading in, it may have an impact on your current pair as well. So you should choose indicators to follow carefully.