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Why you should use a forex economic calendar
Written by: PaxForex analytics dept - Tuesday, 17 January 2017 0 comments
One of the keys to success when trading forex is to know why the market is moving in a certain way, and to be able to anticipate these moves. On the whole, the biggest market-moving events tend to be the release of key economic data such as the US nonfarm payroll number. While the reaction of the market to these announcements can be unpredictable at the best of times, they do present excellent trading opportunities. The simple yet efficient way to managing information from announcements is to keep an economic calendar.
The currency rate is constantly changing and it’s not possible to consider all the factors that trigger these changes. You have to choose the tools that will help you build a profitable strategy. This is where economic forex calendar comes handy. It helps you to follow the most important economic events and predict the currency rate changes. Economic forex calendar is a convenient tool that lets you stay updated on the important economics news.
Forex economic calendar lets you filter the events, sorting them by relevance and expected deviation from the previous result. Forex calendar will let you stay abreast of economic updates. Forex trading calendar requires a preliminary review and thorough study, which will allow you to determine the news that
are most important for your strategy. Positive news lead to currency rate appreciation and negative news decrease the rate. Despite the fact that the market does not react on every single event, it is still important to consider the releases in your daily trading plan.
A forex calendar prepares you to take action. It is a medium of distribution. As the types of information you will get from a forex calendar, are specific to forex exchange, you don’t have to worry about the specifics to start trading. Forex calendars offer information from hourly to daily basis - that means you will have a good knowledge about what is going on in the forex market based on the recent information.
Since any news announcement has an effect on the volatility of a currency, it is recommended that new traders should avoid areas where there is impending news updates. Volatility around the currency can start as early as an hour prior to an economic update, and will continue to be volatile until an hour after the release of economic data. This completely upsets a trending market, and most signals and indicators will not work effectively anymore. The price of the currency affected with an economic update usually finds its earlier equilibrium after an hour, and then it will be safe to trade a trending market again.