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Economic Calendar And Forex Trading: Insights For Taiwanese Traders – CFDs are complex instruments and carry the risk of losing money quickly due to leverage. 54% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take a high risk of losing your money.
Economic calendars provide the dates and potential impacts of scheduled national and international events that are likely to affect the price and popularity of given markets or assets. Because certain types of events are known to affect trading in significant, predictable ways, the nature and date of each event on the economic calendar can be used as trading indicators to maximize profit potential. Is. Recurring news events make the most influential indicators because they have predictable effects on trading sentiment and volume. Examples include scheduled publication dates for broadly calculated market statistics or surveys, and anticipated events such as federal decisions on interest rates, the trade balance, and inflation. While other international events can affect market volatility, the economic impact and timeline of single events is less certain and can therefore be difficult to trade. There are many free versions of economic calendars available online, but designated trading platforms offer account holders more flexible and comprehensive calendar access. Before you choose a random economic calendar, remember that your calendar is only as useful as the events relevant to the market(s) you’ve chosen. Since forex trading is international in nature, it is helpful to have a calendar that allows you to set your own eligibility criteria and filter results by country and currency used. . Most economic calendars provide a brief description of each event and a value for “Actual,” “Forecast,” and “Previous.” The “predicted” number, expressed as a percentage or as a currency value, represents the market impact — positive or negative — of the expected event. This number influences trading sentiment and behavior leading up to the news event. “Prior” refers to the change recorded since the last news event of that nature, and “actual” tracks the objective price movement that occurred after the event in question. Your calendar can also provide some background on each event and compare current market performance against forecast values, as in the free version of our economic calendar below. In addition to providing this basic information, a more sophisticated economic calendar will allow you to filter results according to your chosen markets and help you assess the impact of each event given your specific eligibility criteria. will do Using our customizable Forex Economic Calendar, you can easily choose which currencies and/or markets you want to focus on and filter events by currency and relevance or impact on your chosen market. are Benefits of Following an Economic Calendar The main reason for using an economic calendar is obvious: as a forex trader, world economic news has a direct impact on your existing portfolio as well as the development of new trading opportunities. An economic calendar keeps this information organized and provides important context to help you track events and understand their potential impact on the global forex market. With an easy-to-use calendar at your disposal, you can keep track of upcoming news and events while planning trades and waiting for potential market movers to occur. Economic calendars are widely used by traders who want to think ahead and take a predictive approach to their trading strategy. While this forward-thinking approach is generally beneficial to your trading strategy, it’s also important not to overreact to upcoming events or recent news revelations. Events on your economic calendar can cause rapid fluctuations with currency pairs or with the forex market in general, but if you are careless with your trading, this overreaction can be painful. May cause damage. Take a balanced approach to evaluating news as it develops, and focus on the overall macro environment shaping the market for the forex pair. When you try to make quick profits by trading on the emotional reactions of other traders, it’s only a matter of time before you get burned. Important News Events in Forex Trading Not all news events have significant impact or reliable indicators. When it comes to currency trading, there are certain events that have a greater economic impact than most. Nonfarm Payroll (NFP) Reports This US report tracks employment rates for the majority of the US labor force (excluding farmers, the self-employed, non-profits, federal intelligence, and the military). These reports are released by the Bureau of Labor Statistics on the first Friday of each month and detail the previous month’s statistics. The NFP report includes data on the number of new jobs created over a one-month period, the net national unemployment rate, and the national labor force participation rate—that is, the number of Americans who are actively looking for jobs or Gainfully employed. . All three statistics are seen as indicators of a country’s overall economic health and have a significant impact on both market sentiment and the relative value of the US dollar. Central Bank Interest Rate Decisions In the United States, the central bank refers to the Federal Reserve, aka the Fed. There are seven other major central banks around the world (the European Central Bank, the Bank of England, the Bank of Japan, the Swiss National Bank, the Bank of Canada, the Reserve Bank of Australia, and the Reserve Bank of New Zealand), and interest rate decisions are among them. Any key player will affect how much profit or loss Forex traders make when borrowing a given currency or holding a position. An interest rate decision or news announcement by one of these major global banks is bound to affect trading sentiment and increase market volatility for the respective currency pairs. Widespread news coverage of quarterly forecasts also affects market volatility leading to interest rate decisions, as noted in this Washington Post article on September 26, 2018, a few days after the release of the US Federal Reserve report. Published hours ago. Durable Goods Orders This monthly report from the U.S. Census Bureau provides a useful measure of industrial activity in the United States. Based on the number of durable goods shown in the report, it can provide a reliable indicator of economic strength. A high number—which measures gross orders in billions of dollars—reflects an economy that may be recovering or gaining strength, while a low number often indicates a stagnant or retreating economy. It is related. Retail Sales Index Similar to the Durable Goods Orders report, the Retail Sales Index is released monthly by the US Census Bureau. It reflects overall retail spending in the United States for the previous month, and that retail spending is used to gauge the spending power of the American public—not just overall economic power, but consumer spending on the economy. Can also show confidence. Consumer Confidence Index This index combines several different data points to create a score that reflects overall consumer confidence in the U.S. economy. A baseline score of 100 reflects neutrality among consumers, while scores above 100 indicate that consumers are more confident in the economy, and more likely to spend rather than save. Conversely, scores below 100 reflect greater economic anxiety and uncertainty, likely evidenced by consumers’ decisions to spend less, save more, and stretch their finances ahead of possible consequences. Is. News Events as Trading Indicators To take advantage of news events, start by selecting a major currency pair that is likely to be affected by a major news event. For example, when using the NFP report as an indicator, you should look for a major USD currency pair because the NFP is a measure of the US markets. Once you find a currency pair, determining which direction to trade is a bit more important. Rather than placing orders based solely on predicted numbers or market bias, interpret this information in the context of your other technical indicators and insights. Assess current market trend, strength, and direction, and assess support and resistance levels leading up to the news event and follow immediately. If a news event is expected to reflect positive market sentiment, you may see a sharp rise in prices prior to the news release and a sharp decline if the news defies popular expectations. can. As with any smart trading strategy, timing is of the essence. Day traders want to take advantage of price fluctuations due to market biases caused by major events, but long-term trading strategies tend to favor those with a more conservative outlook. By waiting to enter a position until shortly after the event occurs, traders can take advantage of the volatility caused by the event and actual vs. forecast to help predict bearish market movements. Can use default values. }
Economic Calendar And Forex Trading: Insights For Taiwanese Traders
CEO Limited, Graeme Watkins is an FX and CFD market veteran with over 10 years of experience. Key roles include management, senior systems and controls, sales, project management and operations. Grimm has contributed to the main roles.
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