A Guide to 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. 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 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.
If you want to be successful in using these events to your advantage, then you not only need to know when they will occur, but you need to anticipate which direction that market will move as a result and why. While market movement can be unpredictable, being able to anticipate it can give you opportunities to have a successful trade. It remains curial to know when these events will occur but whether to use them or not, is completely up to you. Choosing a financial calendar should be your first task.
If you will look at all the macroeconomic indicators, you need to choose which the best one for you is. The first thing you should consider when looking at a financial calendar is what asset you are trading. Certain indicators affect currency pairs either directly or indirectly.
If you are going to choose an indicator to follow, then it should be according to the type of trading that 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. Short term it either bolsters or hurt market sentiment and long-term if affects the price. 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.
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. Events may have an impact on currencies you are not trading in but you will never know its impact on your currency pair. You need to take good care of choosing the indicators that you will follow.