Trading Toolbox – how to Use the Economic Calendar Effectively

Do you want to know more about the perfect forex trading toolbox? Watch our latest video to learn how to use the economic calendar and get profitable trading results.

How to Use the Economic Calendar – A Powerful Tool

Without a doubt, one of the most important tools a Forex trader, or any other trader for that matter, has at their disposal is an economic calendar. This gives us the “heads up” as to what announcements are coming. Not only do they tell us what happens today, but they can tell us what is happening in the next few trading sessions, something that can tell you when you want to, or perhaps don’t want to, be involved in the financial markets.

For example, if a major economic announcement is coming out of the United States later today, perhaps trading the US dollar or even US stock markets would be dangerous. If you do not follow economic announcements and economic calendars, it is very likely that you are going to be surprised by volatility when the announcement comes out. This can lead to very unpleasant circumstances.

There are economic calendars freely available across the Internet, at various news sites and forums. For example, there are places such as Bloomberg, CNBC, FT, and Forex Factory that offer excellent trading calendars. This will keep you informed as to what could move the market, the fundamental landscape of economies being traded, and of course upcoming announcements that you should avoid. The last thing you want to do is put on a large position just ahead of a market moving event only to find yourself losing money rapidly. Unfortunately, this is a mistake many of us make when we are new to trading.

Before you place every trade, the one thing you should do is check your economic calendar to make sure that you are not doing something dangerous. Even seasoned veterans know better than to put money to work without checking these announcements. We have all been burned more than once doing that, hopefully we have learned our lesson.