What Are Financial Calendars For?
Knowing the global events that impact currency exchange rates are important for traders in the forex market. These market-moving events can be kept track with using a financial calendar. Exchange rates are influenced by events like changes in GDP of currencies you are trading in, interest rate decisions of these countries, consumer price index and a lot more.
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 are able to know when the events will occur and anticipate the resultant movement of the market and why then you can be successful in using these events to your own advantage. While market movement can be unpredictable, being able to anticipate it can give you opportunities to have a successful trade. While it is completely your decision to use these events to trade, it is crucial that you know when these events will occur. But first, it is important to choose a financial calendar that you will be comfortable with.
You can choose from many macroeconomic indicators but which one is the best for you? The first thing you should consider when looking at a financial calendar is what asset you are trading. The effect of certain indicators on currency pairs can be direct or indirect.
If you are going to choose an indicator to follow, then it should be according to the type of trading that you do. If you are a buy-and-hold or intraday trader, then different indicators will affect markets either temporarily or long-term. There are indicators that affect both, though. The sentiment of the market can either be bolstered or hurt short term, and price is affected long term. Price is affected by the direct correlation with inflation and reverse correlation with the exchange rate.
The reality is that if you regularly monitor your financial calendar, you will be able to follow the trend better and even spot a trend before the market does and benefit 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. For example, if an event only impacts some currencies that you are not into trading, but it can have an impact on your currency pair too. You need to take good care of choosing the indicators that you will follow.