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Today’s topic is about the Economic Calendar. All traders need to know exactly what this tool is used for.
We will cover the importance of why you should always have an economic calendar up on your browser when trading the market.
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Do you know what an economic calendar is? This crucial calendar is a designated spot where authors publish various government’s economic health reports. Traders seek out the calendar to determine which reports are the most important to look into as well as what date and time officials will be releasing the information.
Why is the calendar so important for you? Your success in trading greatly depends on your ability to keep up with various government bodies’ health as these have a strong relationship to the valuation and subsequent pricing of currencies you are trading.
You should also be alert of other market factors that may impact your trading in general. Use the economic calendar to select and read up on the various governments’ economic indicators as well as other market events that can potentially impact your investments.
High impact economic releases will likely impact the market. The most famous example is the US non-farm payroll that happens on the first Friday of every month. Depending on the actual number that is released and how it compares to what is expected, the market for EURUSD will react. In the past you will see moves as big as 100 pips on such a release.
It goes without saying that a move of 100 pips could either make you a lot of money or zero out your account depending on your trade size. Read more about trade size in the excellent article we have in the Education Center.
So, now that we know how high impact releases can affect your trading, it should be obvious why you always need to have the economic calendar open. If you are going about your regular trading, and you happen to have a large trade floating, and all of a sudden the market moves 100 pips, you could find yourself in a very bad position.
If you had taken a look at the economic calendar and knew that the currency you normally trade has a release that could affect the price movement, then you are able to adjust your strategy to minimize the risk of exposure to a big unexpected loss.
Reputable economic calendars do a good job of updating in real time and highlighting to you what is important and what are normally viewed as a less risky release.
That one is simple. If you take a look at our client resources, you will find a page dedicated below where you can see all the news events for that day or week. Feel free to take a look and let us know if you have any questions. As always, we are more than happy to assist you.
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