How to read an economic calendar?

Economic calendar list the dates and potential effects of upcoming local, regional, and global events that could have an impact on the demand for and price of particular markets or assets. The nature and date of each event on an economic calendar can be utilized as a trading indication to increase profit potential because some sorts of events have been known to have a large, predictable impact on trade. Because they have predictable effects on trade sentiment and volume, recurring news events typically constitute the most persuasive indications. Examples include the dates that well-respected market statistics or surveys are expected to be published, as well as upcoming events like federal decisions on interest rates, trade balances, and inflation.

Benefits of reading the economic calendar

The primary justification for using economic calendar is simple: As a forex trader, the news about the global economy directly affects both the growth of a trader’s current portfolio and new trading chances. An economic calendar maintains data organized and offers crucial context, which a trader can use to follow events and comprehend their prospective effects on the world FX market. You can take into consideration forthcoming news and events while making trade plans and anticipating potential market movers when a trader has an easy-to-use calendar at your disposal. Traders who wish to plan ahead and adopt a predictive approach to their trading strategy frequently use economic calendars. Additionally, it’s crucial to avoid overreacting to impending events or to the details of a just issued news item. Economic calendar events can quickly cause volatility in a currency pair or the forex market as a whole, but if a trader trades recklessly, these overreactions can result in costly losses. Traders should keep an eye on the macroenvironment as a whole that is influencing the market for a particular currency pair.

What are the most important forex economic news?

The top news events are the following:

• NFP (non farm payrolls) reports
• Central banks interest rates decisions
• Retail sales index
• Consumer confidence index

NFP reports: The Bureau of Labor Statistics publishes the reports on the first Friday of every month, and they include data from the preceding month. The national labor force participation rate, or the number of Americans who are actively looking for work or are gainfully employed.

Central banks interest rates decisions: The Federal Reserve is referred to as the central bank. The decision to raise or lower interest rates by any of the other seven significant central banks will have an impact on how much money forex traders make or lose.

Retail sales index:  It indicates total retail sales for the previous month in the United States. Retail sales are a measure of Americans’ purchasing power since they can reveal the general health of the economy.

Consumer confidence index: This index takes into account a number of different data sources. Consumers’ neutrality is reflected in the baseline score of 100, whereas scores above 100 indicate greater economic confidence and a propensity to spend rather than save. Scores below 100, on the other hand, show increased economic worry and uncertainty.