For successful trading, the trader must be aware of the latest economic and political news, as it affects the fluctuations in currencies and prices of various assets. The information obtained needs to be analyzed and future action predicted. Since it is not easy for an ordinary person to filter out a large flow of information and predict everything accurately, developers have created tools to help the trader save time and reduce the chance of mistakes.
The economic calendar is a tool analyzing the market, in other words a summary of all international news, with the time of their release and the forecast. The main advantage is that you do not need to collect the necessary information on different platforms, it is enough to switch, for example, to the economic calendar of the TradingView.
How Do I Use Forex Calendar?
Forex calendar provides important information for the trader. Economic calendar is very convenient and understandable. By going to any online platform you can choose the date you are interested in. Key figures such as time, area, importance, event, period and key figures are available in the calendar: previous, forecast and actual.
How To Trade On The News?
The more important the more important a news story is, the more changes there are in the market movement.
Most global news that every trader should know:
- Gross domestic product;
- Consumer price index;
- Non-pharm news, that is, changes in employment;
- Basic indicators of goods;
- Trade balance;
- Retail sales;
- Index of industrial production;
- Interest rates.
These news and events have a very strong impact on the economic performance of the financial market. If we take, for example, non-farm news, after the release of this event, its publication and voice there are global changes in the world market. In just a matter of seconds, the market price can soar up or down in an instant. This happens as during a typhoon or the strongest hurricane, there is absolutely no possibility to oppose these events. Even technically, it’s impossible to open or close a deal at this point. The whole world seems to freeze as the candle rises up or falls down. During the release of such news, an experienced trader can earn several thousand dollars at once, for a fraction of seconds. And with the wrong approach to trading, with the wrong analytical forecast, literally in the same fractions of seconds the trader can completely ruin. Therefore, it is very important to take into account the output of such economically important news when working in financial markets.
Let’s look at these indicators and their conditions in more detail, and the importance to the economy.
1. Gross Domestic Product Or Reduced GDP
This indicator reflects the ratio of all goods/services to total market value produced over a period of time within any country. It is clear from the name that this indicator is relevant for internal measurements in the country. What’s that talking about? The reflection of GDP growth estimates shows a clear direction, past economic indicators. It is with this indicator that the overall standard of living of the country can be assessed. The higher these indicators, the more stable and sustainable their growth, the more prosperous the country itself, its stability and prosperity are considered. If this indicator is higher than predictable (expected), it indicates that the currency of the country in which such indicators are issued will increase, strengthen. Sometimes this can generate increased interest from investors, resulting in a rise in shares and a decline in the safest assets, such as the US dollar or gold.
2. Consumer Price Index
It is a change in any goods or services in price, in other words a change in the price of these services and goods. These changes are also calculated and reviewed over a certain time period. This indicator is calculated as domestic, for the country, and annual changes are calculated at percentage levels.
This is a very important indicator that directly indicates the stability of prices in the economy of this country. It should also be taken into account that inflation itself has a large impact on the change in currency value. And central banks will continue to apply such measures as regulation of certain interest rates in order to influence the change of inflation and stop its undesirable development, reduce the rate of growth.
It is such changes, which are expressed in interest rates, that have the most direct and immediate impact on further currency valuations.
3. Changing Employment (Non-Farm)
This is probably the most favorite indicator of all practicing traders. The day when this event occurs, namely, the first Friday of each month, is considered a salary day for traders. It is on changing the indicators of this news that you can make great money. The indicator itself shows the number of new jobs outside agriculture. If it increases, it means that the number of jobs has increased, and therefore the dollar will rise, as the country’s overall economic stability has improved. The smaller the unemployment testimony, the more prosperous and stable the atmosphere in the country, which also leads to the appreciation of the dollar. Thus, by properly analysing the financial market, drawing appropriate conclusions on financing, jobs and unemployment, using a certain trade method, it is on the basis of employment readings that huge profits can be made.
4. Basic Indicators Of Goods
This key figure refers to orders for any items that are used for long-term use. This indicator of durable goods is considered very important in the world of financial transactions. Due to the fact that it has an enormous impact on the effect of changing the course of trading, traders can immediately open deals after the news. What does this indicator tell us? As the overall productivity of goods increases, there is active production growth. In other words, enterprises actively produce the necessary products/durable goods, and this in turn leads to an increase in the total income, to the economic growth of the country, to increased jobs. Hence, the economy of the country is strengthening, and therefore the currency of the country is strengthening.
We get the following table/diagram:
Productivity Gains – > Job/Hiring Increases – > Hence Get, Consumer Spending Increases = and all of this leads to stability and improvement of the economic situation in the country as a whole, as spending accounts for more than seventy percent of the economy ‘s overall readings.
Still this indicator can be considered as a leading indicator for production data, on which it is also possible to make excellent money.
5. Trade Balance
The difference between the import and export of items over a period of time is calculated here. The most understandable and predictable of all indicators. As demand for exports increases, the country’s currency increases and strengthens. That’s what financiers play on.
The Retail Sales Index is a monthly report for all types of items sold. This indicator is important. If its values are higher than predicted, it is estimated as strengthening the bull market. And, on the contrary, when lowered, a bearish market, it means weakening economic factors.
Therefore, before starting its trade, it is very important to have a general understanding of the economic situation in the financial market, to be able to make and use the fundamental analysis of the market.