I spoke with two different traders this week about the Forex Factory Calendar which has prompted me to write an article on the topic. I didn’t realise that many Forex traders are not aware of Forex Factory or other similar sites that offer economic calendars. This is a little unsettling for me because I was very lucky to find out about Forex Factory very early on in my trading.
Forex Factory is many things, but for me, its main use is the economic calendar. They also offer trading forums and news plus it’s a really good community of traders over at the Forex Factory Forum.
Economic calendars are very important for any trader who is trading the Forex market especially if they are using smaller time frames (smaller than daily). When you first start trading sometimes the market will move against you very rapidly and seemingly without reason, often this is due to news or financial data being released about one of the two currencies that you are trading.
Every day there is key data being released by different organisations and traders use this information to profit from the markets and to gauge the overall economic health of a country and its underlying currency.
Forex Factory will show you each day what you may need to look out for and why it’s a must check resource for any trader.
Below is an image which I have copied from the Forex Factory site. I have highlighted what I consider to be the two most important things that I look at.
The smaller circle with the red forex factory logo inside is the impact of the news on the market with the time of the news release on the left. Red items suggest that usually, the news will affect the currency, lots of the data that comes out each day has a little immediate effect on the market and Forex Factory use a colour scheme to highlight potentially big data items.
The second larger circle teaches you what to expect from the data release, often it will give you an example suggesting how traders react to the financial numbers being released.
What happens in the currency markets is estimates are made by organisations that are responsible for the data, now when those estimates are miscalculated it has a tendency to affect the currency.
I won’t go much more into the benefits of Forex Factory, I just suggest you check it out! Especially if you were previously unaware of how economic calendars are used by traders.