Why know the Financial Calendar

Let’s go with an entry about a tool that interests you a lot, the economic calendar to trade in Forex. As you are seeing above, on this same page you will have access to it before, during and after the publication of macroeconomic data. It is constantly updated so that you have access depending on the day you are looking at it. I recommend that you bookmark it to always have it on hand.

Real-time economic calendar provided by Investing.com Spain.

But, first of all, we are going to see what this is and why I tell you that it is a tool that you are quite interested if you trade currencies (or any other type of asset).

1. What is an economic calendar?

An economic calendar, as its name indicates, reflects when and what in economic matters is going to be published worldwide. It can be the decision of interest rates by a country, production price indices, trade balance, economic events… in short, you show any event that may affect the economy and financial markets.

2. Is a calendar important in Forex?

As you know, in the Forex market (as in all) they affect news, macroeconomic data, government decisions… therefore follow an economic agenda It allows you to know when the biggest movements in the market will take place. We can even use this to not trade or even as some traders do, to trade the news.

3. When should I look at the economic calendar?

Depends on the frequency of your trade, if you do swing trading (operations that last several days) it may have little relevance to your operations and it is enough to look at it once or twice a week. If, on the other hand, your operations are more aggressive, reviewing the economic calendar every day can give you a clearer vision of the market. You know, more day trading, more focus, which is something that doesn’t sell much but is there.

4. What is important in a macroeconomic calendar?

If you take a look at the agenda that you have above, you will see that many days a lot of data is published and many of them are not of great importance. You can configure this to stay only with those that are really important. Even sometimes, those that are important a priori generate little movement in the market. Still, don’t trust yourself.

5. Trading based on macroeconomic data.

It is very popular to read or hear some traders say that they trade forex with news. What they are looking for with it when there is high volatility is to earn a lot in a very short time. Be careful, the message sounds very nice but the reality is not so much. The high or tall risk It is also something to calibrate well, in addition to stop loss sweeps, slippages when entering the market… you have to keep these things in mind.

6. Technical analysis, fundamental analysis and the economic agenda.

Really whether you do technical analysis or fundamental analysis the economic agenda matters. You may think that since you do technical analysis you don’t care about all this stuff about macroeconomic news. You can really partly, but to follow the market keep them in mind or you can be upset. If you are in a fairly large position within the pound and there is news about the UK Brexit referendum, this can annoy you, to say the least.

If you focus or are focused on fundamental analysis to make buying and selling decisions, you will know very well the importance of following the macro calendar and you will work with economic data as a source to make your decisions. This well done is a great job, all my respects.

7. Where to look for Forex news data

On this same page, above. In addition, there are other well-known ones such as Investing, FXstreet and different portals where you can see this type of calendar, each one with a different style. In the end it is a matter of taste, choose the one you like best and where you feel comfortable. The source of the data is usually the same.

8. Publication of macroeconomic data

Some people obsess over when this data is published to buy or sell based on how good or bad this data has been. Mistake. Two points:

  • In free portals the publication of the data is done with some delay and to avoid this we should contract Bloomberg-type platforms (it is a paste to maintain them for the independent investor and they do not make much sense). But it is not even so, today the execution of orders is mostly done by algorithms. In the time it takes you to observe the data, open the broker and place an order, the algorithm may even have already closed the position. Focus your objective is other more profitable patterns.
  • Another thing, do you think that because a piece of data is better than expected it will benefit an asset to rise or vice versa? The answer is no. sometimes this is discounted in the price Now or the data is good but worse than expected. If you are a retail trader, I recommend that you do not enter this war unless you are very clear about it.

9. World Indices and Commodities

Surely you wonder if this agenda is only for the Forex market or if it is useful in the case of trading indices or raw materials. China’s macro data, without going any further, is moving most of the world indices. Events in the United States cause the main markets, including the European indices, to be affected both positively and negatively.

Another example is oil, which in turn has a direct relationship in some currency pairs due to the countries where it is traded and where there are large reserves. The publication of oil inventories is a very important piece of information that is taken into account by investors and traders.

In the end, either directly on the publication that affects the asset or country in question or indirectly, it is important to have control over its publication so that it does not catch you offside.

10. How do I use the economic calendar?

I am going to tell you how I use the economic calendar and how you can use it yourself. If you do algorithmic trading as is my case, that is, you have automated market entry and exit operations, you can carry out different actions:

  • Create Strategies that avoid operating at times when high-impact news is published for markets (for example, on Fridays at noon).
  • Adjust systems to market volatility. We can calibrate the amount and distance to stop loss based on the variability of prices. If it is high, it is convenient to leave stops further away so that they do not jump you at the first change with strong movements. Indicators like the ATR (Average True Range) for example can help you with this.
  • Disconnect systems when there are Brexit-like events or important government decisions at a specific time.

Beyond that you can design them yourself according to your preferences, these are some ideas. Normally, regardless of this type of event, I use the economic agenda like this: weekend where I usually look at what posts there will be in the next few days and cEvery morning when I get up where I review only the data and the next hours (of that day).

Don’t worry if you can’t stay glued to the screen because you work or are busy. In addition to the Internet browser you normally use, there are mobile apps that allow you to view them. In fact, you can already do it from your smartwatch. It is not that you are obsessed with constantly refreshing the page or application to see what happens, remember that it is simply about having control.

I hope you can use this agenda and that it makes things a little easier for you, that’s what it’s all about. If you have doubts or comments, do not cut yourself. Below you can write me whatever you want, if you read this, it’s free!

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