If you are interested in the Forex market, you must know how to use an economic calendar in Forex trading. The most important thing to know is that different types of calendars are available for use. Before moving ahead let’s understand what economic calender is.
What is an economic calendar?
An economic calendar is a calendar that involves detailed information about events, dates, economic reports, GDP releases, central bank policies, and consumer price indexes.
These calendars are used by traders, investors, and economists to predict the market condition and make the decision accordingly. Currency values are greatly affected by such events. Therefore traders use these calendars to make profitable investments.
A quick glance
An economic calendar is a calendar that involves detailed information about events, dates, economic reports, GDP releases, central bank policies, and consumer price indexes.
Free economic calendars
Paid Economic calendar
For example, it is rare to see a gold calendar with a significant price movement in the past. Therefore, you will not want to trade in gold unless there is a significant change in the metal’s value
- Daily reading
- Time setting
- Identifying event
- Customizing calendar
- Analyzing and decision making
Types of Economic Calendars
Forex calendars can give you a general idea of how to trade using the economic calendar on any given day. However, a trader can use an economic calendar in Forex trading for different reasons. It is important to choose the Best economic calendar. You can choose between a free economic calendar and a paid one.
Free economic calendars: Free ones are the easiest ones to use in Forex Trading. These do not give you accurate information, but they are very convenient.
You enter the dates and the prices, and the system will provide you with the best predictions for the next few days. There is a lot of information that you will get from this type of software.
When you use them, you will have access to information such as which currencies are stronger in value at specific times of the year. You will also get information on which currencies are weaker in value.
It makes it easy to determine which currency pairs you should be trading in. You can then trade them accordingly to maximize your profits.
Paid Economic calender: The other option is to pay for a Forexcom economic calendar. This software will not be accessible when you use this method. You will have to pay for the updates to the software that you need for your trading.
It can be very expensive, but it is a very convenient way to track all the data you need to trade successfully.
Usage of Economic Calendar
You must understand the concept of how to use an economic calendar for Forex. You must learn when specific dates occur throughout the year to trade these currencies.
You will also have to consider these dates’ conditions if they are challenging to obtain. For example, it is rare to see a gold trading calendar with a significant price movement in the past. Therefore, you will not want to trade in gold unless there is a significant change in the metal’s value.
While learning how to use an economic calendar in currency trading, you must understand that you will never depend on this tool entirely. You still need to research and study the trends that happen in the world of foreign currency trading.
You need to make sure that you know when certain currency pairs will rise in value. Watch out for trends where several currencies are falling.
It would be best not to trade on these when you have little chance of winning. Instead, it would be best to wait for the ideal time for you to enter the market.
How to read an economic calendar
- The first and foremost step is to check the calendar every morning to get an idea of upcoming events.
- Set the economic calendar according to your local time.
- Take a look at the events which may, directly and indirectly, affect currency trading. It will help you to formulate your strategy.
- The economic calendar has information regarding all the news. However, not all are useful for you. So the next step is to customize your calendar for currency trading.
- Analyze these events and place a trade accordingly.
Conclusion
An excellent way to learn how to use an economic calendar in currency trading is through a complimentary trading platform. These platforms allow you to enter and exit trades using your Currency or Trade station screen.
It lets you determine when you are ready to enter the market. You can also practice various strategies on these screens. With practice and the right tools, you will easily predict when specific trading trends will happen.
An intelligent trader always makes use of the best information available. It includes how to use an economic calendar in Forex Trading. You can use the calendar on the Forex trading screen in many ways.
You will find that it is easy to read and understand. Once you learn how to use this tool, you will quickly become successful in the Forex market.
