How to Read the Economic Calendar
An economic calendar is an invaluable tool for every successful trader. In this article, we’ll show you how to read calendar news so you never miss a trading opportunity.
The economic calendar (also called a forex calendar, FX calendar, or trading calendar) is a must-have for every trader. It doesn’t matter if you rely strictly on price action or technical analysis. No one wants to open a position only to face unexpected volatility, which can quickly lead to hitting your drawdown limit.
It’s easy to avoid this! Just check if any major event is scheduled on the day you plan to trade. These events could significantly impact the value of the instrument you’re trading.
What Is an Economic Calendar?
Also known as a forex economic calendar or FX news calendar, it’s a chronological list of events with macroeconomic significance. These events cover categories like monetary policy, labor markets, inflation, and economic activity.
For traders using fundamental analysis, an economic news calendar is essential. It helps predict market trends by linking events with potential impacts. Technical traders should also pay attention to calendar news, as announcements often cause volatility. While volatility can create opportunities, it can also be risky – especially when managing drawdown limits on Fintokei programs.
How to Read an Economic Calendar?
An economic calendar forex tool organizes events row by row. For each event, you can see:
- Time of the announcement
- Country releasing the news
- Event importance
- Name of the event
- Reported values
What Do the Values Mean?
The values in the forex news calendar are usually displayed as:
- Current value (left)
- Expected value (middle)
- Previous value (right)
Fintokei tip
What matters most is how much the current value differs from the expected one. The larger the difference, the bigger the market reaction – and the higher the volatility.
How to Identify Important Events?
In most economic calendars, events are ranked by importance, often shown as symbols like bull heads.
Not Sure What an Event Means? We’ve Got You Covered!
Events in an FX calendar follow regular cycles, and each type impacts the market differently. If you want to master fundamental analysis and take advantage of Fintokei’s news trading features, keep an eye on our “Locked on Fundamentals” article series. It’ll bring you closer to passing the Fintokei challenge!
