What Is An Economic Calendar?
An economic calendar displays the key economic data for the selected days. It can be a very helpful tool as you may want to take an action (buy or sell) at a particular time when the data is particularly strong. You can select multiple currencies and multiple countries for analysis. You can even filter data according to a range of different criteria. The calendar displays all the relevant information for a given calendar day.
Economic calendars offer very valuable information that can help you understand economic indicators. They are extremely useful for fundamental analysis. The data shown is in real time and are refreshed daily. So they are extremely timely and provide up-to-date information on economic activity.
Economic calendars are very popular tools used by forex trading experts to analyze global news. The availability of data such as G DP (Gross Domestic Product) for the last two weeks can help you decide if the recent news reflects the real economic data around the world. You can look at various indicators from different countries to understand where the focus of attention lies. Economic calendars can be configured so that they present data in different formats (dollars/yuan, Euros/dollar, etc.) that can be easily compared across time periods. Select which currency pairs you want to analyze and start trading.
Forex market has become very big over the years and many investors have made money trading in it. Many experienced traders use economic calendars to analyze data and decide on their trades. They can also select their currencies to trade and place their orders. You can see the technical analysis reports of the major currencies that can be helpful in determining the direction in which the currency pairs are moving.
An important feature of a forex trader‘s tool is the analysis of fundamentals. A fundamental analysis looks into how well the two currencies are related to each other, especially their long-term potential strength. This includes data like current price gaps. You can also determine the size of open positions based on the fundamentals of the pairs. When the open positions of two currencies are similar then traders usually enter long positions with high spreads. This means that the risk of loss is relatively low.
When the economic calendar presents a calendar that has several news events then this may suggest a period of fundamental volatility or change. Volatility shows the overall change in the value of a certain pair over time. News events can lead to short-term volatility, whereas long-term volatility indicates the overall range of the currency prices. The longer the time frame studied – say a week – the better the traders will get the signal. In some cases, a short-term volatility can be seen as a signal of an underlying trend. However, when it is accompanied by a longer time frame like a month then this can also be an indication of a temporary change.
Economic calendars can help forex traders determine which currencies to trade against, as well as when to sell them. The general rule is that the higher the currency’s relative strength (based on the economic calendar) is, the better it is for the trader. Conversely, when a currency’s strength is decreasing, the trader would do better to sell the currency instead of buying it. But in the event that the trader does not have enough information to make an accurate judgment, he or she can check for the current trends using fundamental analysis.
There are several ways to use the economic calendar, although the most popular is to analyze the data it presents. If you want to see an indication of a trend, then you should see if the unemployment rate is increasing or decreasing. If unemployment rate increases, the currency value goes up, whereas if it decreases, the value goes down. Using the unemployment rate as an example again, if the unemployment rate goes up and the economy grows, then the gDP (Gross Domestic Product) of the country should increase, thus causing the currency value to rise. But on the other hand, if it goes down and the unemployment rate increases, then the gDP decreases, thus, causing the currency value to drop.