Economic calendar is a vital tool for traders, as it gives them real-time updates on important information that can help in making the right trading moves. The updates on important factors like upcoming global events, announcements, and news, helps the traders to identify and follow the trends.
By being equipped with latest information, the traders can better predict the movements of currency pairs. Your knowledge about the factors affecting the Forex market will give you opportunities to make profits.
Why traders make use of economic calendar?
For successful trade positions, you will need to consider the geopolitical and economic aspects across the preferred currency pairs. It is always better make the moves, by keeping any eye on the bigger picture. By using the economic calendar, you will be able to keep track all the important aspects that affect international and domestic trades.
The impact of economic events on prices is unpredictable, but it is still significant to know about them. You will surely get an idea of how the market is expected to respond, and it helps you in making the right trading decisions.
How to apply economic calendar?
The Forex world is always changing, so it is important to understand the reasons that are impacting the market movements in a specific manner. Understanding the trends can be the key for your Forex trading success. Traders will need to be prepared by the time of announcements, and act accordingly. Economic calendar is the best way to manage information.
You can maintain an economic calendar in different ways. Many brokers also provide these calendars to their clients. You can customize or input the information manually and create a personal trading calendar. You can copy the whole list on MS Word or Excel document, highlight vital events, and delete less crucial ones.
You will then need to monitor the information you highlighted on the indicator. When you see that the date of announcement is approaching, you can act according to the forecast anticipation of the said announcement. You will be able to use the new data and fine-tune your trades, accordingly.
Below are some best indicator tools for trading efficiently.
List of economic indicators available from Economic calendar:
- Gross Domestic product or GDP is the most vital indicator that displays the financial values of a country’s domestic and international trades.
- Purchasing Managers Index or PMI keeps track of manufacturing conditions. Industrial production index or IPI measures productivity figures in the factories, utilities, or mines, of a country.
- For measuring inflation, two vital indicators are PPI (Product Price Index) or CPI (Consumer Price Index). It measures an average price for buyers and sellers.
- CCI (Consumer Confidence Index) displays the financial health, confidence, and spending power of average consumers. Remember, consumer’s confidence is the key to overall economic performance of a country, so it can directly affect the currency exchange value.
- Trade Balance Report is important, because policy makers and investors use it to determine US economy’s health and its connection with the world. It provides helpful clues to future GDP changes, which are not clarified via domestic consumption and production.
- Employee Cost Index or ECI reflects changes in salaries, benefits, and bonuses. It is a quarterly report that gives an insight into forthcoming inflation trends.
- There are many other reports that can be considered as helpful including, Consumer credit report, Durable goods report, Employment situation report, Existing home sales report, Factory orders report, jobless claims report, Money supply, Mutual fund flows, Personal income & outlay report, Retail sales report and more.
In this way, Forex traders can pay close attention to worldwide events using economic calendar. Monitoring the date and time of specific declaration is vital, because the probability of it impacting the market movements is high.