In the fast-moving world of currency markets where huge moves can seemingly come from nowhere, it is extremely important for new traders to learn about the various economic indicators and forex news events and releases that shape the markets. The key to successful trading is to be prepared and the Forex Economic Calendar will help you to have a better overview of what is happening in the market and to make the best trade decisions. Because the most important news can cause heavy price fluctuations and volatility.
You cannot consistently make successful trades without knowing the current state of the market, using an economic calendar is an easy quick way to stay on top of fast shifting markets. Even small events can cause brief ripples in the market and give a patient, observant investor time to slip in and make a tidy profit. This, in conjunction with sharing trade strategies or advice across the web, could give a relatively new trader that extra edge.
An economic calendar is a schedule of data releases and news events which relate to the financial markets and the economy of the world in general, including information about interest rate decisions, GDP data, and Non-Farm Payroll numbers. Economic data is released frequently, sometimes on a daily basis and on several occasions through the week, and all of these events can be found listed on an Economic Calendar which will also outline the scheduled time at which the release will be made.
Although being aware of all economic events is important for serious traders, the ones that are most vital are those marked “High Impact”. Around the time of these data releases, there will always be strong volatility in the markets and this will result in some traders canceling their orders while liquidity may drop triggering instability in asset prices before a final direction is decided. In order to limit risk, investors can check their economic calendar on a daily basis before commencing trading. This means that they will be aware if the market is likely to become volatile and can then decide whether to avoid trading during this period or to attempt to increase their profits by taking advantage of market volatility.
To become a successful trader, you need to be aware of news, market trends and global events and using an economic calendar is the best way to obtain this information at a glance. To be effective when trading, it is vital to consider the bigger picture of all of the political and economic factors that can influence the market, and an economic calendar supplies the investor with all of the important aspects that need to be borne in mind. Although it is not always possible to correctly predict the effect of these economic indicators on market prices, having a clue about how the market could generally be expected to react is of significant value and helps the investor to make an informed trading decision.
