The forex market is influenced by many factors, such as economic data, political events, central bank decisions, and market sentiment. These factors can create volatility and opportunities for traders who can anticipate and react to them. However, keeping track of all the relevant events and news can be challenging, especially for beginners.
That’s where the forex factory calendar comes in handy. The forex factory calendar is a free online tool that shows the upcoming economic events and their expected impact on the forex market. It also provides historical data, actual results, and consensus forecasts for each event. By using the forex factory calendar, you can plan your trades ahead of time and avoid being caught off guard by unexpected market movements.
How to Access the Forex Factory Calendar
The forex factory calendar is available on the Forex Factory website, which is one of the most popular forex forums and news sources on the internet. You can access the calendar by clicking on the “Calendar” tab on the top menu bar. Alternatively, you can use this direct link to view the calendar for today’s date, or this link to view the calendar for the current month.
How to Read the Forex Factory Calendar
The forex factory calendar displays the economic events in a table format, with each row representing an event and each column showing different information about it. Here are the main columns and what they mean:
- Date: The date and time of the event, adjusted to your local time zone. You can change your time zone settings by clicking on the clock icon on the top right corner of the calendar.
- Currency: The currency that is affected by the event. For example, USD stands for US dollar, EUR stands for euro, GBP stands for British pound, etc.
- Impact: The expected impact of the event on the currency’s volatility, measured by colored icons. Red icons indicate high impact events that can cause significant price movements, orange icons indicate medium impact events that can cause moderate price movements, and yellow icons indicate low impact events that can cause minor price movements. Gray icons indicate non-economic events, such as bank holidays or daylight saving time changes.
- Event: The name and description of the event. You can click on the event name to see more details, such as the source, frequency, and explanation of the event.
- Actual: The actual result of the event, released after the event occurs. This column is blank until the data is published.
- Forecast: The consensus forecast of the event, based on the average of various analysts’ and experts’ predictions. This column shows what the market expects from the event before it happens.
- Previous: The previous result of the event, released in the last period. This column shows what happened in the past and how it affected the market.
How to Use the Forex Factory Calendar to Plan Your Trades
The forex factory calendar can help you plan your trades in several ways:
- You can filter the events by currency, impact, or date range to focus on the ones that are relevant to your trading strategy and goals.
- You can use the forecast and previous columns to compare the expected and actual results of an event and see how they differ. A positive surprise (actual result is better than forecast) can boost the currency’s value, while a negative surprise (actual result is worse than forecast) can weaken it.
- You can use the impact column to gauge how much volatility an event can cause and adjust your risk management accordingly. For example, you may want to reduce your position size or widen your stop loss before a high impact event to avoid being stopped out by a large price spike.
- You can use the event column to learn more about an event and understand its significance and implications for the economy and the currency. For example, you may want to know why a central bank decides to raise or lower its interest rate and how it affects inflation and growth prospects.
Conclusion
The forex factory calendar is a useful tool that can help you stay informed of the upcoming economic events and their potential impact on the forex market. By using it wisely, you can plan your trades ahead of time and avoid being surprised by unexpected market movements. However, you should also remember that the forex market is not only driven by economic data, but also by other factors such as political events, market sentiment, technical analysis, and supply and demand. Therefore, you should always use multiple sources of information and analysis to make your trading decisions.
