Important Facts When Reading Forex Economic Calendars
As you all know, the Forex economic calendar is a helpful tool for traders who were to stay updated with the latest news events in the financial world that could shape up the fundamental analysis. But what really is an Economic Calendar?
The Economic Calendar
An economic calendar is a trading tool allowing traders to know about some of the most important economic information that is scheduled to be released. Economic events such as consumer price index, GDP, non-farm payroll report are considered important events in the trading world as they can influence market prices. In the economic calendar, there are events and it is categorized as low, medium, and high. These grades are dependent on their impact on the market. Trading tools and software is very important in predicting the movement of prices in the market, especially if the software is from a reputable source such as IRESS.
Reading the Economic Calendar
Now that you’ve known the importance of economic calendars and where it is used, lets us know how to read it.
Once you know how to read the economic calendar, you will know how to maximize your trades before and after the scheduled event. Before you start your trading day, it is important to check your economic calendar first so you can familiarize yourself with any upcoming events that could affect the market.
Top 3 Benefits of Using Forex Economic Calendar
There are three main benefits of using a Forex Economic Calendar and this includes proper management of risk in trading, being able to accurately plan ahead of time, and getting access to a lot of helpful and amazing features for your account customization.
You Get To Prepare a Risk Management
Risk in trading is inevitable. Although you can control it you can never totally remove it from your trades. That is how risk management comes in handy. If you have the ability to plan your moves in the market, you can somehow make adjustments to counter it. This will only be possible if you know the financial-related events which can happen in the future. And thanks to economic calendars, this is made totally possible.
If an event is listed in the calendar, there will be an occurrence of high volatility. This is the time when you should prepare yourself and plan the risk that you can afford to have. It is very important to understand the risk management principle when it comes to these trades.
You Get To Plan Ahead
With the help of an economic calendar, you can plan ahead of time the movements that you can do in the market. For instance, there is a Nonfarm Payroll report which is about to be released. Traders will be informed of this data ahead of time as this information can influence the market movement substantially.
In addition to the benefits offered by economic calendars, there are also some brokers who offer added features like customization and sort. This is really great especially if you want your trading tool to have specific timeframes, filters, and custom alerts that make it more relevant to the strategy that you will be adapting. If you are interested in trading software, you should go for companies with big names such as IRESS, since they have years of experience in this matter.