Trading forex can be both interesting and rewarding, and thanks to online platforms like Oanda, it is something anybody with a bit of capital to invest can do in their own time. Of course, making profit from trading foreign currencies is all about being able to make the right predications and follow market analyses, and this is a skill forex traders at all levels need to master.
One of the most important tools anybody looking to do well as a currency trader needs is a good economic calendar that covers events in the countries affecting the currencies they watch and trade in.
It’s Not Just Major News That Affects Currencies
You may think that by following the news alone you can get a good sense of what is happening and how it may affect your pairs. However, there are things just about every week that count as key events in market terms which may not be as worthy of mainstream news coverage as say, a general election or a new law. These are usually things that are planned, and set out in the economic calendar.
What Type of Thing Does the Economic Calendar Include?
There are some things on the economic calendar that you will probably already be aware of, for instance when a country plans to set a budget, or when a federal bank is set to announce whether interest rates will change. However, these types of things that affect the whole country in question are usually only at most quarterly, so what else will you find going on that may affect your currency pairs? Usually you will see a lot of events on the economic calendar that involve announcements or reports on specific sectors of industry and their performance, as well as statistics on things like employment. In some cases, these only have a minor impact on currency and are of more interest to stocks and commodities traders, however some can affect the currency of a country quite significantly.
How to Use an Economic Calendar
Most forex sites and tools include economic calendars, and they are very easy to find especially if you are concerned with major currencies like the US dollar, Euro or GBP. When you have one, it is simply a case of knowing which events are coming up that relate to a trading session you have planned, and doing some research. Look at how much similar events have affected your currency and read up on what people anticipate for the upcoming announcement or event.
By using this information in your normal analysis, you can make better informed trades and also ensure you don’t lose out on opportunities because you missed an important report or announcement.