Economic Calendar Indicators
An economic calendar is typically used by traders to track currency–market related events, including central bank policy decisions and other economic indicators. Currency markets are complex systems that react to external stimulus and in turn affect foreign exchange rates. Consequently, it is important for forex traders to understand economic calendar and currency market trends. Economic calendar events, which are generally released or announced in an official report, possess a high probability of affecting the foreign exchange markets adversely.
Economic calendars are prepared by central banks, governments and other monetary authorities on a monthly basis. In order to understand market conditions better, they are widely available on the Internet. Economic information on the basis of the calendar is released to the public approximately six times a year. Economic data, including readings on inflation, unemployment and balance of trade, are released in January, April, June and September.
Investors need to be aware of economic calendar dates in order to plan ahead with trades. Traders must determine when they will buy or sell currencies based on the signals of the calendar. Traders can effectively take advantage of market changes by taking advantage of opportunities that come up on the move. This makes them more prone to losses, if they do not plan ahead with their trades.
The economic calendar indicates periods of time when there is high volatility, or the tendency for prices to change rapidly from one day to another. Volatility is seen as the measure of the amount of risk that an investor is exposed to in any particular trade. High volatility means that the risks of losing money are high. Conversely, the opposite is true of low volatility, which means that the chances of making money are also low. Economic releases provide indicators for market participants to identify opportunities for trading, where they can make large profits, but they also serve as a warning for people who are still learning the ropes about the risks of trading forex.
For people who are new to trading form, it helps to have a sense of the major economic events that occur in the world, including U.S. Federal Reserve meetings and European Central Bank meetings. The schedule includes scheduled inflation rates, released GDP figures, as well as other important economic data that can influence international markets. Experts include these dates on their calendars because they can allow traders to prepare their strategies for these dates ahead of time.
Another important economic calendar indicator is related to news events. These news events help traders determine how interest rates may change. News events also include announcements regarding government policies that may affect the economy. When the Fed decides to raise interest rates, for example, it can change the rates that traders buy and sell. If you want to get an edge over other investors, you need to be knowledgeable about news events and the direction that they may take the economy.
A firm’s performance is also included in the economic calendar. Allowing traders to see the performance of a company’s CEO can influence the way that the firm’s stock performs. If you have an idea of which CEOs are performing well, you can adjust your strategy accordingly. You may also want to see the performance of a company’s sales representatives. On the other hand, if a company releases data that is disastrous for the company, you may be eager to sell your stocks. By taking stock price fluctuations into account, experts can determine when to sell or buy stocks.
Many of the indicators used in economic calendars focus on national interest rates, inflation, unemployment, political stability, and other important economic indicators. Other indicators may include GDP growth, interest rates, market volatility, and stock market performances. These are just a few of the many that can be found on economic calendars all over the world. As you look ahead to the future, these indicators can provide you with a clearer picture of what is going on.