Economic Calendar

Trading Widget: The Economic Calendar

The Economic Calendar or the forex news calendar is a schedule of socio-economic and political news events that measure the performance of the economy of countries that shape the destiny of the world. As we all know, there are countries whose economic policies and happenings in their political arena can affect the way we live and how trade and commerce operates. For instance, almost all globally traded commodities are priced in US Dollars. Therefore, any activity of a country which results in export and import of goods and services will be ultimately affected by what happens to the value of the US dollar. That is why economic news data from the US are very important. There are other countries that play similar roles in the world economy, and that is why the economic news calendar was devised; to capture the events in these countries that shape the global economy and put all this information into an easy-to-interpret timetable.

The events captured in the economic news calendar will ultimately affect the exchange rate of the currency of the country in question, the currency of other countries which are tied to the economy of this country, and other currencies which are paired with the country of interest in the forex market. That is why the economic news calendar commands the attention it does from traders and market players not just in forex, but in other financial markets as well.

Real Time Economic Calendar provided by Investing.com.

 

Real Time Economic Calendar provided by Investing.com

What Makes Up the Economic Calendar

The Economic Calendar provides the following information:

a)    The country that the news release will be coming from, as well as the currency of the country in question. Usually, the currency comes in the internationally accepted abbreviation (USD for US Dollar, SEK for Swedish Krona, etc).

b)    The date and time that the news will hit the market. The time of news release is set to the Eastern Time of the US, also known as East Coast Time or EST by default on most platforms. Some platforms allow traders to set the time to the local time or to GMT, according to their preferences.

c)     The title of the news item to be traded.

d)    A little drop down pop-up box which contains a clickable link. Clicking this link will open a pop-up with a brief explanation of what the news is all about.

e)    A volatility bar which shows the market impact the news will have. The format of display differs from platform to platform. On some platforms, a colour code is used (red, amber and green for high, medium and low market impact respectively). Stars may also be used (5, 4 or 3 stars). Traders usually focus on the high impact news.

f)     The expected/consensus number, which is what a poll of economists reveals the news expectation figures will be.

g)    The previously released news result.

h)    Any revisions to the previously released figures.

i)     A column for the actual release. Some platforms have a refresh button beside this column which gives an auto-update so that the figure is entered into this hitherto blank column when the news is released.

Using the Economic Calendar Widget on Investoo.com

The first thing you will notice is that you will be able to customize the look and feel of the economic calendar so that your preferences can be displayed. One thing you may like to customize is your time zone, so that the time of news release can be changed automatically from EST to your local time or any other time you choose for your convenience.

You can also set the calendar to display just one day at a time (the current day) or display the calendar for the week or month. Other advanced options may allow you to generate an HTML code so you can put up the calendar on your website (if you have one).

After customization, the next step is to know how to use the economic calendar. You have to note the following:

a)    Previous number

b)    Expected number

c)     Deviation, which is the difference between the expected and previous number

d)    Whether the actual number exceeds or is less than the deviation. This is what will determine if the news item is tradable. Generally speaking, the more the actual figure deviates from the deviation number (either to the upside or downside), the more volatility and the more tradable the news is in terms of number of pips that can be obtained.

e)    You must also know in what way the news item is good or bad for the currency in question. In essence, you must know how to interpret the number. This information can be obtained from the drop-down box beside the news release title.

Learning to use the economic calendar is one of the secrets of successful forex trading.

Adam

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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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