This article will provide beginner traders with information on how to trade based on the information collected from the US economic calendar, it will include information on the different types of features that the calendar tends to have, and will explain some of the key indicators you need to know and follow on a regular basis.
What is the US Economic Calendar?
- A type of financial calendar that lists economic data releases, announcements etc
- Some types of indicators are more important than others
Prior to making your trades on the Forex market, it is essential to consult the US data calendar. This is to ensure that you are aware of the key upcoming changes and data releases that will likely have an impact on the trades that you plan to make on US currency pairs.
There are many different types of daily data releases, economic announcements, political news announcements, and other important events that occur regularly which shape the US economy and society at large, and therefore, have a significant impact on the trading within the Forex markets.
The US economic calendar is a type of financial calendar that stores all of this information, and is updated frequently in real-time to reflect changes, indicators, news, and upcoming events that traders and financial industry workers need to be aware of.
What's more, there are some changes and indicators that are more significant (in regard to the impact they have on the economy) than others, such as the GDP (Gross Domestic Product) figure that reflects the amount of value of the goods and services generated by a country within a given period, and the US non-farm payrolls figure, which is the total sum of all workers in non-farm jobs and other related roles.
So what should you be looking out for in the economic calendar?
How to trade using the US economic calendar
Before we go to a core info that may help you to trade with the economic calendar, let's also point out the main advantages of this approach.
Being ahead of the curve
- Professionals trade based on anticipations, and tend not to trade at the point when events occur
As always, it largely depends on what you are trading. In the case of Forex trading, it will depend on the currency pairs that you are trading with.
Experienced traders tend not to trade based on the announcements from the US economic calendar, but instead use it for it's main intended purpose (as a calendar) to keep track of the events as and when they occur.
These traders will have anticipated how the data releases will affect the currency pairs they are trading with, and will have made the necessary adjustments to their trading positions in order to respond to any major changes that may occur as a result of the data releases.