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. Some of these events that influence exchange rates are changes in the GDP of the currencies you are trading in, interest rate decisions of these countries, consumer price index, and 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. But then, most of the time, market movement is unpredictable but it can present you will excellent opportunities to succeed in your trade. While it is completely your decision to use these events to trade, it is crucial that you know when these events will occur. The first step, of course, is to choose a financial calendar that you are comfortable with.
You have to choose from the many macroeconomic indicators which one is the best for you. You should look first at the asset you are trading when looking at a financial calendar. Certain indicators affect currency pairs either directly or indirectly.
When choosing which indicator to follow, you should also consider the type of trading you do. There will be different indicators that will affect the market temporarily or long-term if you are a buy-and-hold or intraday trader. 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. While it is important to focus on specific announcements of events, what is more important is to 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. This is why it is good to choose the indicators that you will follow carefully.