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. These market-moving events can be kept track with using a financial calendar. 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 create your own financial calendar from online research, it is best to use the financial calendars offered by online platforms which contain indicators that are automatically updated at regular intervals. You can even find financial calendars that show you the importance of each indicator and will inform you which ones will likely influence that market.
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. But then, most of the time, market movement is unpredictable but it can present you will excellent opportunities to succeed in your trade. It remains curial to know when these events will occur but whether to use them or not, is completely up to you. But first, it is important to choose a financial calendar that you will be comfortable with.
You have to choose from the many macroeconomic indicators which one is the best for you. The kind of asset you are trading determines what to look at in a financial calendar. Certain indicators affect currency pairs either directly or indirectly.
Following the type of trading you do is another consideration when choosing which indicator to follow. If you are a buy-and-hold or intraday trader, then different indicators will affect markets either temporarily or long-term. But some indicators affect both. Short term it either bolsters or hurt market sentiment and long-term if affects the price. It affects price because it has a direct correlation with inflation which has a reverse correlation with the currency’s exchange rate.
You need to regularly monitor your financial calendar so that you can follow trends better and who knows, you can spot a trend even before the market does and it can benefit you greatly from your trend analysis.
All the political and economic factors that can impact your current fair should be considered when using a financial calendar. You don’t just focus on specific announcements or events but keep the bigger picture in mind. Events may have an impact on currencies you are not trading in but you will never know its impact on your currency pair. This is why it is good to choose the indicators that you will follow carefully.