The reason why traders should pay attention to price movements through the Economic Calendar is that they do not lose a crucial moment if you want to get profits consistently. The influence of monetary policy and political policy often makes spontaneous financial market movements. Thus, there is always a change in price movements every hour.
The Economic Calendar usually displays a table per certain date that contains several chronological events on a daily basis. According to Investopedia, investors and traders use the economic calendar to plan trades and portfolio reallocations.
Usually, in the economic calendar there is the following three information:
- Forecast (a projected number of market participants)
- Previous (the number of results from the news in the previous period)
- Actual (a number that shows if the figure is better than Forecast then it will have a positive impact on the country’s currencies)
For a country currency that has a high or good impact, it can affect the market price. It is also important to determine the position.
Lots of information contained in the Economic Calendar. However, in the forex market, traders are more focused on the following three data:
Interest rate
Activities in the forex market are closely related to interest rates because they can determine the flow of global capital into and out of a country. The higher the interest rate, the more attractive the currency will be. Vice versa.
Inflation
The central bank as the guardian and supervisor of inflation tends to raise the country’s benchmark interest rate. One reason is to attract many interested people in the lending sector so that credit automatically decreases.
Non-Farm Payrolls (NFP)
One of the most important agendas awaited by traders on the economic calendar is the NFP report
issued by the central bank of the United States (US). NFP is an indicator of the economy in the US as well as being the strongest factor in influencing the determination of US central bank interest rates. NFP comes out every Friday the first week of every month.
In conclusion, don’t forget to change the default calendar clock and match the time of your area so that you are not too fast or too slow to determine the position.
Read more: 5 Advantages of Trading Using Robots
