As forex education has bettered, it’s become clear to traders that technical analysis and price action is only a piece of the puzzle. Fundamental analysis and news events play a huge role in where the market moves and how it gets there. Luckily, we don’t have to spend hours each day reading through news articles and trading terminals to find the news releases. We can use the economic calendar, posted by Forex Factory. Let’s find out how…
Using The Forex Factory Calendar:
- Head to the Forex Factory website.
- Set your local time zone.
- Filter out the irrelevant news.
- Click on the folders for more information regarding each release and the forecasted notes.
Using The Forex Factory Calendar – Step By Step Guide
There are two main reasons you need to be using the economic calendar in your forex trading journey. The reasons are simple, you either want to capitalise on news releases and take advantage of that volatility, or you want to completely avoid this volatility and make sure you have no positions in the market.
Let’s find out how to read this calendar…
1. Head To Forex Factory’s Website
The economic calendar isn’t the most user friendly or aesthetically pleasing website in the world – but it serves a valuable purpose!
2. Setup Your Local Time
By default, the forex calendar won’t set to your local time zone. In order to reduce the chance of human error you really should set it correctly. Luckily, you won’t need an account to do this and it’ll remember your preferences if you continue using the calendar on the same device!
To do this, click on the clock on the top right hand side of the screen – then save your local settings.
3. Filter The Noise
One busier trading weeks there are going to be a huge amount of news events each day. The large majority of these will be irrelevant. Luckily, on Forex Factory we can filter out a huge amount of the irrelevant news releases.
I would recommend:
- Remove grey & yellow ‘Expected Impact’ releases. These are not usually responsible for any kind of price movement as they hold no weight.
- Filter out any currencies you don’t trade. For most retail traders this will be the CNY.
- Keep all event types as they could all be relevant to price movement.
4. More Information
Once you have filtered out the news events, you’re ready to go! Most traders don’t have a great understanding of fundamental analysis, which is fine. Forex Factory actually help break it down in more detail by clicking on the folder icon.
This will help you make more informed decisions as to whether to keep your positions in the market, or go flat. I’d highly recommend referencing the notes against FxStreet and Forex Live as they’re two very reputable forex news sources.
The Most Important News Events On The Forex Factory Calendar
Although all news is important, some of the news events are going to be much more volatile and hold a huge amount of weight. I would highly recommend staying flat (no positions open) during these news events until you have seen them unfold a huge amount of times. News releases are fairly unforgiving when it comes to wiping out whole account balances, with very aggressive moves and high amounts of slippage!
The most important news releases are:
- Rate releases
- Employment news
- Bank holidays
- Non Farm Payroll
- Monetary Policy
- Retail Sales
Although these are the main high importance news events, there may be some news events that are lower impact, but do more damage in terms of pips moved – that’s why you must be very careful if trading during news releases!
In Conclusion – Using The Forex Factory Calendar In Your Trading
I hope you have found this very simple guide to using the forex factory economic calendar useful! If you have any further questions, please do let me know in the comments down below.
Again, please use a huge degree of caution when attempting to trade fundamentals – they are very volatile and there have been a huge amount of retail accounts blown due to trying to trade this way. Use at your own risk.