Investors use the economic calendar to monitor market-moving events. These events can range from monetary policy decisions to announcements of economic indicators. They are typically announced in a report with a high likelihood of affecting financial markets. To help you stay on top of these events, here are some useful tips:
The economic calendar contains a list of events scheduled to take place at varying intervals. These intervals depend on the country and the type of event. Major events are usually released monthly, while minor events are not. Minor events are not marked, but those with medium impact are marked as such. Similarly, yellow markings indicate caution. And, red dots or stars indicate important news or data releases. These events are crucial for monetary market traders.
In trading the economic calendar, you can utilize pending orders to make trades before data is released. Some assets tend to behave differently before data is released. Using pending orders to trade the economic calendar is an effective way to take advantage of volatility before data is released. For instance, you could purchase EUR/USD at 1.1200 and place a sell-stop at 1.1180. You should make sure that your stop-loss is placed before you enter a trade, or else your order will be triggered by the data.
The economic calendar is a handy tool for traders and investors. It lists when major economic releases are scheduled. This information can affect individual security prices as well as the global market as a whole. Many trading websites and platforms offer their users a free economic calendar. The information contained within is easy to read and provides various features. In addition, it’s easy to set up and use. If you want to get an overview of upcoming events, you can download a Bloomberg Terminal.
European Central Bank meeting is held every month. After these meetings, the Governing Council of the European Central Bank announces its interest rate decision. Investors use these announcements to get an idea of ongoing policy changes and predict future policy developments. In addition, the ECB is responsible for the release of monetary policy. If the data is a reflection of a country’s monetary policy, the interest rate will be changed accordingly. And so on.
The economic calendar is a vital part of the foreign exchange market, so you should incorporate it into your trading strategy. Fundamental releases and geopolitical events drive currency markets. Traders should pay attention to the economic calendar and the macro-environment in general. If you implement this into your strategy, you can significantly increase your profitability. You may even end up holding profitable trades longer than you otherwise would. But make sure you’re not overreacting and triggering your stop loss.