In forex trading, there are many forex trading tools and equipment that we can use to help the trading we do, like how to read the forex factory calendar.
The existing equipment and equipment can make it easier for us and make us understand how to do the forex trading market.
Also read: Know More About What is A Forex Trading for Beginners Traders
One tool that is useful and often used is the forex calendar. This calendar makes it easy for us to keep an eye on every event that occurs in the forex market, what things move the financial markets, and so on. However, what exactly is a forex calendar, and how to read it easily?
This article will discuss things related to it. What is the full explanation like? Let’s start by discussing what exactly is a forex factory calendar below.
What is Forex Calendar?
The forex calendar is a table that lists information related to international economic news, which will have an impact on forex trading movements.
The news that appears can have a big or small impact, depending on the content of the news itself. Therefore, every trader must monitor the Indonesian forex factory calendar in order to make forex trading decisions.
The Indonesian forex factory calendar uses fundamental analysis techniques by including information and news from the economic calendar.
The movement of money market prices will be driven by the economic news itself. In this case, the role of the economic calendar is very important.
However, what exactly is the detailed function of the economic calendar itself for forex traders? We can see the explanation below.
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What is the Function of the Forex Calendar?
In simple terms, the forex calendar serves to provide a description of every important event and event in money market activities and economic activity in general.
The forex calendar contains information related to economic events that are delivered by date and time. Economic events that occur in a country can affect the value of the currency in that country.
Another function of this calendar is that it can be used as a trading indicator in order to maximize profits or profits from trades made.
Therefore, the economic calendar will be very functional and useful for investors, traders, and brokers alike. For traders who will trade forex, it is obligatory to use the forex calendar or economic calendar as a consideration.
By using the economic calendar, traders can benefit. One of the most useful advantages is being able to know what time an event will be released and the effect that event has on forex price movements.
There are several important events that have an impact, namely:
- Monetary Policy Announcement
- Interest Rate Announcement from Central Bank
- Nonfarm Payrolls (NFP)
- Final Gross Domestic Product (GDP)
- Federal Open Market Committee (FOMC)
- Unemployment rates (Employee/Unemployment Data)
An above event is an event that affects the movement of the currency market. In the economic calendar, each of the above events will be listed and taken into consideration for us to trade forex.
In trading, the important thing for us to do is protect our margins. And getting profit is the next step.
Also read: What is Forex Money Management For Beginner Trader?
How to Set Time Setting in Forex Calendar
In Forex Factory, the timings are definitely not appropriate. Between the time at Forex Factory and our time. Therefore, we need to set the time in Forex Factory with the current time.
For Indonesian forex traders, of course, the applicable time is Indonesian time (western part, central part, eastern part).
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How to set the time at Forex Factory is very easy, we can click the corner on the right on the front page of Forex Factory, then compare and adjust it with the calendar settings on our laptop or PC. However, make sure you have a good internet connection. So that the adjusted time is in sync.
We can visit the forexfactory.com news website or also download the forex factory app, to be able to set the time settings and also use the economic calendar itself.
How to manage this time is very important, because we may not be able to get accurate and up-to-date information if we don’t have a synchronized time.
Let’s go straight to the important discussion, namely how to read the forex calendar. We can see the discussion below.
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How to Read and Use Forex Factory Calendar for Beginner Trader
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How to read the forex calendar is actually very easy, we only need to know the components in the calendar to read it.
The following is a guide to reading it by knowing each function in it. That is:
1. Time
Time is the time column for the release of economic data, which is adjusted to the time of the broker’s server that provides MetaTrader.
The time column will display several country flags that represent the currencies that are affected by the release of economic data.
2. Currency
This column is an affirmation of the country’s flag symbol representing the currency of that country.
For example, if there is a USD in this column, then we as forex traders must be aware of the impact of the release of economic data on the value and movement of the US Dollar.
Including if there is an IDR in this column, we must be aware of the value of the rupiah (Indonesian) currency.
Also read: What is Forex Trendline Analysis
3. Event
There are several important activities in the forex market that can affect money market price movements. In the previous discussion, several very influential events have been mentioned.
This column will provide the date and time of the event, with some estimates of its impact on currency values.
4. Priority
Impact of data releases on currency prices. One signal indicates low impact, while two signals indicate moderate impact, and three signals indicate high impact.
However, when reading these signals, we must first determine the effect of the released data not always in accordance with the indications of the existing signals.
Because, there are many other influences into consideration, which can have a big impact on shifts in price values.
5. Forecast
It is a number of data release predictions issued by experts and experts. Usually, the numbers in this column already appear before the actual release of the data is published.
This predictive figure is usually very impactful and influential because it can also affect traders who read the economic calendar.
6. Previous
Represents the results of data released in the previous calendar.
The data is used as a comparison to predict the data that will be released next. This data will usually be compared with actual data.
7. Actual
The results of the latest released data will appear according to the time and date of release.
From the results of this data, it will be compared with the data in the previous, as a reference for determining.
8. Impact or Volatitas
Volatility is a color code that can help traders to know how important and impactful news, information, or event is released by the economic calendar.
There are two colors, yellow volatility which indicates news that has a low impact on the market, and red volatility which indicates news that has a large impact on the market.
When we know the columns and signs above, we can do how to read the forex factory calendar very easily.
Because we already know every function of the components in the economic calendar itself. However, what is the things that must be considered when we use the economic calendar?
What are the things to watch out for?
After knowing how to read the forex calendar that has been described above, we also have to know some things that we must pay attention to in reading the forex economic calendar.
Because, because there are many calendars available, from the best forex calendars to the most accurate forex calendars.
Usually, traders have a calendar that is a mainstay, depending on the convenience of the traders themselves.
Some of the calendars that are often used are the forex factory gold, the DailyFX calendar, the FXStreet calendar, and others. Regardless of which type of forex calendar is most accurate, trader convenience is still the main consideration.
In Indonesia’s forex factory, the most popular forex factory gold is used. However, for those who want to use another calendar, there are several things to consider when choosing a calendar, namely:
1. Historical Graph
In the economic calendar, one thing that we must understand as traders is that how small or big the market moves, will affect the trade.
The economic calendar helps us as traders to predict every possibility of currency movements and shifts.
Every movement will be recorded in a graph, every calendar has a historical graph. What we must consider is the historical chart of the calendar itself.
2. Economic Events
Each economic calendar will show economic events, but each economic calendar will cover several different economic events. Depends on the theme and focus of the discussion that is of interest.
But usually, the events discussed are about the decisions of the world’s central banks, the history of the FOMC (Federal Open Market Committee), and also some speeches from world leaders and influential figures.
Speeches and influential world figures can greatly influence market movements and currency values. Especially if what he conveys is related to economic, investment, and business issues.
How to Trade Using the Forex Factory Calendar
So, how exactly do you use the calendar for trading? It’s really easy, we only need to pay attention to two columns, namely the actual column and the volatility/impact column.
Because the two columns in the calendar are the most important and have an impact on us when trading.
If the volatility column shows a red color, then it shows that the event has a high impact. So, we should not trade just yet when volatility is high.
Conversely, if we want to make safe trades, we can use News-Trading and prepare the currency pair that we will choose. We can look in the Currency column for consideration.
Don’t forget, when using News-Trading we must pay attention to Actual colors. If the Actual color is black, then we have to cancel the trade forex.
Because currency price movements are not significant. Meanwhile, if it is red, it will likely have a bearish impact on Currency. And if it is green it will give a bullish impact.
Finally, we must have our own strategy regarding readings in the economic calendar. Experienced traders will take steps and decisions based on a reading of the economic calendar.
Because, basically, the economic calendar is a tool that can be used to make it easier for us to trade forex.
Frequently Asked Questions About Forex Calendar (FAQ)
The following are questions about the forex calendar or the use of the Indonesian economic calendar. The general questions submitted will help us to more easily understand the forex calendar itself.
1. What Does the Forex Calendar Reference Formula Look Like?
The reference formula in the forex calendar is as follows:
- If it is positive > improvement > economic conditions improve > then the currency will strengthen
- If it is positive > downturn > economic conditions worsen > then the currency will weaken
- If it is negative > improvement > economic conditions worsen > then the currency will strengthen
- If it is negative > a decline > economic conditions improve > then the currency will weaken
We can use the reference formula above by comparing the Forecast, Actual and Previous by entering it in the reference formula above.
Then we can get predictions and forecasts to trade forex. What’s more, we can get an overview for making decisions in forex trading.
The forex calendar was created as a reference and reference, as well as information related to economic data released by each country, both developed and developing countries. The positive or negative conditions of the data released by the calendar will be the reference for every trader.
2. What is Positive News in Forex Calendar?
In the economic calendar, we often hear the term positive news. Literally, positive news contains all good information.
However, in the context of the economic calendar, the positive news is information that has prospects that can increase the economic movement of a country. This encourages increased economic growth and reduced unemployment in the country.
On the other hand, negative news contains prospects that can cause a country’s economy to decline and even collapse, while unemployment also increases simultaneously. Not all positive news or negative news in one country also has an impact on other countries.
3. Why If Economic Conditions Deteriorate, Currency Values Strengthen?
The statement if economic conditions worsen will cause the currency to strengthen is a statement that is not true. Because, in fact, when economic conditions worsen, the value of the currency will decrease.
This applies to every country, including Indonesia. Conditions like this will also affect forex trading and are one of the mandatory information in the economic calendar.
Currently, in the forex factory, either in the form of an application or on the website, various services are available for calculating forex.
One of the tools is a forex calculator. This is presented to be able to facilitate all calculations in doing forex trading in order to get a profit or profit taken according to expectations.
Hopefully, the explanation related to the forex calendar that has been described above can add to our insight regarding the world of forex trading. The more we understand everything in forex trading, the more proficient and skilled we will be in running forex trading.
One of the keys in the world of economics, business, and trading is discipline. The more disciplined and obedient to run it, the more skilled we are at it. Because every effort made will never betray the results.
