What Are Financial Calendars For?
Knowing the global events that impact currency exchange rates are important for traders in the forex market. A financial calendar can help you keep track of these global events that move the market. Exchange rates are influenced by events like changes in GDP of currencies you are trading in, interest rate decisions of these countries, consumer price index and a lot more.
You can actually create your own financial calendar by doing research on key indicators but to make it easier, you can use financial calendars offered by reliable online platforms and these have indicators updated regularly. There are financial calendars that you will find that gives you a clue of which indicators will likely influence the market.
Success in using these events to your advantage is in anticipating the direction the market will move and why. 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 can choose from many macroeconomic indicators but which one is the best for you? You should look first at the asset you are trading when looking at a financial calendar. The effect of certain indicators on currency pairs can be direct or indirect.
When choosing which indicator to follow, you should also consider the type of trading you do. Buy-and-hold or intraday trader then there are different indicators to choose that affect the market temporarily or long-term. But some indicators affect both. The either bolster or hurt market sentiment short term and long term it affects the price. The correlation of price and inflation is direct and it has a reverse correlation with the currencies exchange rate.
Regularly monitoring your financial calendar will help you follow trends better and it can benefit you if you spot a trend before the market does.
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. So even if an event impacts a currency that you are in trading in, it may have an impact on your current pair as well. You need to take good care of choosing the indicators that you will follow.