Many factors affect the Forex market, and among them there are economic reports, politicians’ speeches, sentiment indexes calculated by universities, etc. Let’s call them news in brief.
News varies in importance, impact on a particular currency pair, etc. Some traders enter the market at the time of the news release, and another traders on the contrary try to avoid them. In any case, it is important for you to know the time of the news release, degree of importance, value (if it’s a number) and impact.
There is an Economic Calendar section on many sites, but it’s inconvenient to use in most cases or their degree of importance of the event is not quite true reflected. I’d like to consider the most competent version of the calendar in this review.
It is located at the following link:
Setting Up the Calendar
First of all, we should set up the clock so the news release time would be the same as our timezone.
Click the clock at the top of the page:
Next, we see the following settings:
1) DST ON/OFF
Daylight Saving Time – ON/OFF
Choose your timezone
3) Time Format
24 or 12 hour time format of displaying.
4) Next, click Save Changes.
The settings are saved even without registering on forexfactory.
We see the followings columns on the calendar page:
The economic calendar consists of columns with information, which is not difficult to understand. The first column shows a date and a day of the week. The second column – news release time. The third – a currency pair affected by the news. The fourth column shows a degree of influence on the currency pair with colored icons. The fifth column shows a brief description of the news. The sixth column shows a detailed description; you need to click an icon that looks like a folder to see it. The values of news follow: a current value (a value that the news carries) is in the seventh column, a predicted value is in the eighth column and a previous value is in the ninth column.
If the current value is displayed in green color, it means that the results of the news turned out to be more favorable than the forecast. If it is red, then it’s worse than the predicted values. The grey color means that the value of the news is the same as the forecast. You can see a chart of the previous values for a few years in the last column.
There are 2 buttons above the calendar: Up Next, which forwards us to the nearest news, and Filter, where you can set filtering for a currency pair, a degree of influence and a type of news.
1) Date – a date
2) Currency – a currency pair
3) Impact – impact
4) Detail – detailed information of the news
5) Actual – a current value
6) Forecast – a forecast
7) Previous – a previous value
8) Chart – a chart of the previous values
Difference in a degree of importance of the news
A degree of importance of the news is shown in the Impact column:
Red color indicates possible strong effect
Orange – medium effect
Yellow – weak or no effect
White – non-economic events (bank holidays, etc.)
The current value is displayed with:
Green color – it is better than the forecast
Red color – it is worse than the forecast
Grey color – it is the same as the forecast
Let’s come back to the column displaying a degree of importance of the news. The red icon indicates strong effect on the currency. Orange one indicates moderate effect. Yellow one on weak or no effect. It should also be mentioned about gray color; it means non-economic events, such as various holidays or bank weekends.
If European banks suddenly have a rest during business days, then, accordingly, you shouldn’t trade in the European session because you won’t see much activity in the market and possibly spend your time in vain. If there is a holiday in USA, then after the close of the European session, you have nothing to do in the market. You may not pay attention on Japanese holidays because they don’t cause such decline of the market activity.
The effect of news on currencies
Every forex trader must know that the news related to USD affects not only the USD itself, but also every currencies including gold. News related to EUR only affects pairs with EUR. You may not pay your attention on events related to other currencies. As for importance, we ignore all news, except those that are marked with red color.
It is better not to trade 20 minutes before and 20 minutes after the release of critical news. Don’t try to predict the impact of news. It’s almost impossible for an ordinary person. Therefore, it is better not to enter the market, just sit and wait until everything gonna settle down.
Sincerely yours, Pavel Vlasov