What is the Economic Calendar?
The economic calendar will also include statistic figures on monthly, quarterly and annual bases. The budget, discount rate and payment balance are noted. Other pertinent information on the commodity and financial markets will be provided.
Therefore, using the economic calendar provides traders with several advantages, including:
- Being informed when and in which country there are important fundamental news about to be released. The trader can then interpret these news to make decisions accordingly.
- Be aware of when there is a national or bank holiday in different countries.
- Fundamental news will be ranked by level of importance.
- Once news has been released and the market has reacted to them, the trader will be better able to analyse the impact.
Fundamental analysis is of great importance as it helps the trader to engage in more properly informed trading, which has been backed up by relevant news and economic data releases. The economic statistics and indicators, statements issued by central banks and other economic reports of importance all can affect the market sentiment, and consequently, the forex rates. The economic calendar is relatively easy to use, unlike the more complicated technical indicators, and so many traders use it.
As a trader it is important to fully understand the potential impact that certain news could have. In cases when the particular event was predictable and expected to occur, the price may not change, or may change just minimally.
It is also important to compare current data with forecasts.
Many beginner traders tend to think that in case there is a positive report there will be an upward trend. However, this may not always be the case. It is always recommended to analyse fundamental news in conjunction with other news.
Also, at the point when the news is released, there is bound to be more volatility and slippage. And you will need to take this into account as there will be some delay due to the fact that many will want to buy but practically no one will want to sell.
The economic calendar is an important tool, used by many traders. However it is best to use it with other tools as trading solely on the basis of news releases is quite risky. Using technical instruments like trend indicators and oscillators, and observing predictions, is also important.