Helping Your Trade with Financial Calendars
If you are into trading in the forex market, there are some global events that could impact the exchange rate of the currency pair that you are trading in and it is important to keep track of these. These events can easily be tracked using a financial calendar. Changes in GDP of the currencies you are trading in, interest rate decisions of these countries, consumer price index, etc. are some events that influence exchange rates.
While it is possible to create your own financial calendar from online research, it is best to use the financial calendars offered by online platforms which contain indicators that are automatically updated 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.
Success in using these events to your advantage is in anticipating the direction the market will move and why. 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 have to choose from the many macroeconomic indicators 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. There are certain indicators that affect currency pairs either directly or indirectly.
When choosing which indicator to follow, you should also consider the type of trading you do. If you are a buy-and-hold or intraday trader, then different indicators will affect markets either temporarily or long-term. But some indicators affect both. The sentiment of the market can either be bolstered or hurt short term, and price is affected long term. The correlation of price and inflation is direct and it has a reverse correlation with the currencies exchange rate.
You need to regularly monitor your financial calendar so that you can follow trends better and who knows, you can spot a trend even before the market does and it can benefit you greatly from your trend analysis.
I your use of the financial calendar, what is important is to consider all the political and economic factors that can impact your currency pair. This means that you need to keep the bigger picture in mind and not just focus on specific events or announcements. 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. So you should choose indicators to follow carefully.