How To Use Forex Factory (Economic Calendar): Ultimate Guide For New Traders

How To Use Forex Factory (Economic Calendar): Ultimate Guide For New Traders

What’s up Traders, in this article, we’re going to be talking about Forex Factory, this is one of the most popular forex trading websites available today. Its calendar is quite useful for all types of traders. It will assist you as forex trader in comprehending the influence of news on the market, which could result in more earnings on your account if you use it.

We’re going to learn how to use the Forex Factory economic calendar to help our for trailing stop loss. The first thing I want to do is type in the following URL (forexfactory.com) make sure you type it as well.

If you want to follow along with this tutorial then, you’ll see here that this portal gets displayed. It’s the Forex Factory portal. It’s one of the most popular sites out there visited by thousands of Forex traders every day. 

It's the Forex Factory portal.

So, how can you put the Forex Factory calendar to work for you? To make advantage of the Forex Factory calendar, you’ll need to do the following:

  • Visit the Forex Factory website.
  • Each column, including the actual and forecasted results, should be understood.
  • Set the time zone on your computer.
  • Create your event filter, and then Filter the information you receive.

So you’ll see here that it has different features and you’ll see here, that it has for example forums (Forex forum) where different traders interact and share their ideas and setups, then you will have information about the currency pairs what’s going on with them.

So it’s quite interesting if you want to check what’s going on in the market Then you have a news section and a calendar section, which is going to be the main topic of this tutorial.

I’m produced this (Ultimate guide) to assist you because there aren’t many publications available that explain how the Forex Factory calendar works.

I’m go through how to use this tool for your Forex trading strategy, what each column represents, and how to set everything up, including your time zone, event filter, and news filter, in the sections below.

 

The Economic Calendar of The Forex Factory

The Forex Factory calendar lists upcoming news events that have an impact on global economics.

 

The schedule contains important press announcements

 

  • Data about the housing market
  • Data about the labour market
  • Data on inflation and interest rates

Various news releases are published for a variety of countries at various times and dates. On the Calendar, you’ll notice the following.

So, how do you get your hands on it?

One of the best things about Forex Factory is that you won’t have to download anything in order to use the calendar. Then all you have to do is go to the Forex Factory calendar website, which can be found here.

Then you have a market section, will where you will find different market analysis and insights and then last, but not least you have a broker section in case you want to check it out.

After that, let’s have a look at the various columns on the calendar and see how you can tailor them to your needs.

So let’s jump straight ahead and go to the calendar and the first thing where, I want to draw your attention, is this navigation panel here on the left.

Is this navigation panel here on the left

 

The Navigation Panel for the Forex Factory Calendar

The navigation panel is the part on the left side of the screen. You’ll find a few useful items inside. The current month is the first item on the list.

You’ll see here that this has a shape of a calendar, in fact and you’ll be able to navigate the different days of the month.

You’ll be taken to an area where a timetable of impending forex news data will be made available if you want to select any dates from that month.

Moreover you can change months here with these arrows you can go, you can go as far as you want in time, to check previous events.

But I’m going to stick with today something, that you can use as well are these buttons here, below where you can go to tomorrow’s event this week, next week.These buttons here, below where you can go to tomorrow's event this week, next week

You can also select days in the past, and you’ll get news and information from that day.

 

If you are looking to find a suitable forex broker, be sure to read the following guides:

10 Best Forex Brokers That Give The Most Value To Traders

9 Best Forex Brokers That Are Recommended For Day Trading

9 Best Forex Brokers That Are Recommended For Scalping

My reviews about the best forex brokers in the world that offer the most value and facilities to traders.

Read About:

IRONFX Review                                      BLACKBULL MARKETS Review
XM Review                                               PUPRIME Review
INSTAFOREX Review                             TRADEVIEW MARKETS Review
VANTAGE Review                                   SUPERFOREX Review
INFINOX Review                                    AVATRADE Review
EIGHTCAP Review

 

You’ll also notice a few shortcut options, as well as some links

 

If you click on those links, you’ll be taken to the current day’s news or the news schedule:

This month or next month and you’ll see, that you’ll be able to check all the major economic news or releases, that are coming up something that something.

I mention as well is that whenever, you click a day here or you change, the date you’ll get this information from the main panel refreshed, right?

So that’s important to understand as well and that’s how the navigation panel works, then you can also change Dates here by using these arrows, and the main section or you can also here use these options to filter date ranges.

The main section or you can also here use these options to filter date ranges

Which is could be quite convenient as well, but anyways, then we have the main section, so the main section has different columns, which I want to explain.

 

The Column for Date (Economic Data)

The first column here is the Date which is self-explanatory, then we have the time (hour) of the day, when the news or economic event is going to happen or the release is going to be published and this in local time.

So I’ll explain later how you can change the time, the economic calendar to your computer time, and make sure you don’t miss an event, because you don’t have the right time here.

Then you have the currency and basically this column refers to the main currency, that’s going to be impacted by the news release of course all the Pairs where a determined currency is involved.

This column refers to the main currency

 

The Column for Currency

You’ll find information about currency pairs that will be affected by the release of certain forex data in the currency column.

Take, for example, the United Kingdom’s decision to announce interest rates. This will have an impact on the GBP and the currency pairs that are linked to it.

Even if it’s the base currency or the quoted currency, those pairs will be impacted as well, so that’s something for you to take into account.

Then we have the column related to impact, so if you go to the calendar and scroll down, you’ll be able to see the legend.

If you go to the calendar and scroll down, you'll be able to see the legend

 

The Column of Impact

So the red color, means that its high impact, expected event that it will affect a lot the the market, then there’s medium impact which is illustrated by the orange color, then there’s low impact which is represented by the yellow color.

The impact column examines the potential influence of forex news on a certain currency and its pairs.

 

The four Colours that were used were

 

  • The colour red indicates that impending forex news will have a significant impact.
  • Orange denotes that, depending on the forex news, there will be a medium impact.
  • The colour yellow indicates that the future FX news will have little influence.
  • The colour grey is commonly used to denote bank holidays. As a result, the currency will most likely have a low trading volume on that particular day.

Sometimes you have non economic events, which are gray and I think most of these events are related to bank holidays.

So whenever you spot a bank holiday or several bank holidays in one day, that will give you an idea, that probably there’s going to be low activity for a or low volume for a determined currency pair.

All right, so then we have the description, the main description or the title of the event, then you get to see this column with the detail, which is quite convenient.

Then you get to see this column with the detail, which is quite convenient

 

The Forex Factory News Columns Names

This isn’t a really fancy column. This column contains a list of news items that are expected to be released, as well as their release dates.

 

The Column of Detail

A yellow folder icon appears in the Detail column. By picking that icon, a section containing further information about a certain event will appear.

 

You can use this feature to learn more about objects

 

  • What does the FX event mean?
  • What effect could it have on the currency?
  • The event’s source of information
  • When will similar information be made public?
  • Actuals and projections have a long history
  • The truth about the Column

The real column shows the most recent numbers that have been issued or updated. So, if you’re looking for true statistics on jobless claims in the United States, and the news just came out that the figure is 6606k, you should see that number in the actual column.

because you get more information about a specific event, and more information about it, so for instance, we’re going to check, let’s go back here, because I want to show you an example.

The unemployment claims, let’s take this one as an example and you see here the source, so in this case, it’s the Department of Labor, which is a Government which is the government entity that handles everything related to jobs press releases in the United States.

It's the Department of Labor

Then you have the measures or what’s going on, and here you’ll see that it is the number of individuals who filed for an employee insurance for the first time during the past week.

Then you have the usual effect, which I’ll take this with a grain of salt here. It says actual less than forecast is good for currency, but this is not always the case because there’s a lot of volatility involved.

 

The Column for the Forecast

You’ll see the forecast column after the actual column. That column shows what many were forecasting before the news was made public.

You’ll be able to tell whether your predictions were correct or incorrect by looking at the “actual” figure information in the actual column.

So, please be aware of this, but you can see here that whenever the actual result is higher than the forecast, forecast is like the prediction of most of experts, they give a number that they think it’s going to be.

But then you get the actual press release, and if that press release is in this case is higher than allegedly, is not good for the currency if it’s lower than it will be green and it’s good.

But this is just for reference of course, it will help in the long term to get a good understanding of how a particular economy, it’s it’s working or it’s performing but when it’s released the news it can have a high volatility.

Understanding both the predicted and actual columns is critical. The majority of traders study the discrepancies between these two columns.

If experts believe that Australia’s Reserve Bank will cut the interest rate from two and a half percent to two percent within the month, traders can make trading decisions or change their tactics involving the AUD when the actual amount is announced.

Then you get the frequency some economic news, as you may know are released every month, some of them are released every quarter some events that don’t go by schedule.

So for example, whenever a president is speaking, it could be any time, so take into account that then there are some notes here that you can also check.

 

The Column of Previous

You’ll see the previous figures for the news event you’re looking for if you click on the previous column.

 

The Column of Graph

And why Traders care about this, so this detail Widget it’s very useful or this section is very useful because it gives you more information about the news then you get the whole historical data, which very useful as well.

You can also check the graph.

You can also check the graph

 

How to check the Graph in the Forex Factory?

By clicking on the graph icon, you can access the graph column. You’ll see the actuals vs the prediction statistics based on the news events and dates graphed out for you once you’ve done that.

This can assist in gaining an understanding of how a specific economic indicator has been changing over time.

For example, during the COVID-19 crisis, unemployment claims in the United States soared rapidly.

So for instance as of today, we’re in the middle of the coronavirus crisis or period and you see here, how the trend of unemployment claims has been growing exponentially.

You see here, how the trend of unemployment claims has been growing exponentially

So this this this can give you a perspective of how the what what what to expect in regards to the economy, All right, so let’s close it, then you get here the column with the actual and forecast as we explained before the forecast.

Is that kind of the prediction or the consensus between most of the experts, and they its consolidated here in a number and then you have the actual release, which is the official information and then you have also here.

It’s the previous number which was released before the actual number, then you can also use this window to open the graph again in case you want to.

 

If you are looking to find a suitable forex broker, be sure to read the following guides:

10 Best Forex Brokers That Give The Most Value To Traders

9 Best Forex Brokers That Are Recommended For Day Trading

9 Best Forex Brokers That Are Recommended For Scalping

My reviews about the best forex brokers in the world that offer the most value and facilities to traders.

Read About:

IRONFX Review                                      BLACKBULL MARKETS Review
XM Review                                               PUPRIME Review
INSTAFOREX Review                             TRADEVIEW MARKETS Review
VANTAGE Review                                   SUPERFOREX Review
INFINOX Review                                    AVATRADE Review
EIGHTCAP Review

 

Timezone Configuration

One of the best features of the Forex Factory calendar is the ability to customise it to meet your timezone. That way, you’ll get news based on where you live, which is quite helpful in terms of organising.

 

How to customize Timezone in the Forex Factory?

To do so, take the following steps:

Place your mouse in the upper right corner of your screen.

Choose a time stamp and customise it according to your needs.

The feature should then configure the news event information to be presented in your time zone.

When you first start using the Forex Factory calendar, don’t forget to adjust your time zone. This is due to the fact that the platform must be in your time zone. That way, you’ll be on time for every occasion.

Once you’ve set your time zone, it should remain that way until you wish to change it again. As a result, you will not have to do this every time you access your calendar.

So that’s in a nutshell the main screen where all the magic happens then I want to explain how to set up the so you click here and then you select the time zone.

Click here and then you select the time zone

And then you can pretty much configure if you want to see it in which time format you want to use you can save it.

On well, it’s done.

I’m going to change it again to my local settings, Alright, so let’s go back to the calendar and last but not least you can use this filter, so for instance, if you just want to follow or track the news that have high and medium economic impact, you can select them here.

You can use this filter

 

Application of The Event Filter

While it’s good to see everything, you’ll most likely be overwhelmed by the amount of data the forex calendar will provide.

As a result, it’s preferable to keep organised and have only the information you require right now. You should consider setting up an event filter to prevent wasting time skimming through news that is irrelevant to you.

You may limit the news you view on the Forex Factory calendar by using the event filter. This way, you’ll only see news that pertains to your preferences.

If you’re a trader who only trades a few currency pairs, you’ll want to set up an event filter to keep yourself from getting overloaded with irrelevant data.

 

Use the Forex Factory calendar with event filter

Please complete the following steps to set up this information:

  • Go to the “Calendar” tab at the top of the page.
  • On the right-hand side of the screen, click the “Filter” button.
  • Mark the orange and red boxes with a check. By doing so, you’re instructing the calendar to only provide you with information of high and medium importance. It’s up to you if you want to select low as well.

Another way to save time is to solely follow the news from the countries you want to follow. However, we urge that you monitor all of the key economies because it’s crucial to know what’s going on and how it can affect the major currency pairs.

You can also gain access to breaking news when you need it, so you’re always up to date on fresh information that may affect your transactions. Follow the steps outlined below to accomplish this.

 

How to access to Breaking news on Forex Factory?

 

1.To begin, go to the top of the page and select “News.”

2.Then navigate to “News/Hottest Stories,” which is on the right side of the page.

3.Now, select “Breaking News” and “Latest” from the drop-down menus.

4.Only important news updates will now appear on the right-hand side of your screen.

If let’s say you want to just track inflation and employment and Central Bank economic releases you can You can select them and let’s say you don’t want to track the yuan. or the New Zealand Dollar or the Australian dollar.

You want to just track inflation and employment and Central Bank economic releases

You can apply that filter and you get just information want to check something important here, it’s that this green arrow will tell you which event is going to happen next.

You can apply that filter and you get just information want to check something important here

So, it’s quite it’s quite useful to to always have reference for this Green Arrow and going to remove the filter for now, and you’ll see when whenever an event is going to be released.

You’ll see here this green icon here next to the detail file folder, and that basically whenever is the time of the of the release you can update it, but right now we don’t were not so close to the economic event.

You'll see here this green icon here next to the detail file folder

So that’s why it doesn’t appear, but make sure that whenever this. Green update button appears make sure to press it, if you are tracking a specific release.

 

How to use Fundamental Analysis to Trade Forex?

Having a trading plan for the week/period ahead is the best approach to evaluate economic news. Knowing what data comes next gives you a huge leg up on the competition.

The issue is that everyone is looking at the same information. However, not everyone succeeds in the Forex market. Using the FX trading schedule correctly is one method to succeed.

Keep in mind that fundamental analysis is just as important as technical analysis in Forex trading.

The USD is the starting point for any discussion of Forex volatility and what drives it. As the world’s reserve currency, it has a unique influence on the entire Forex market.

The currency pairs are divided into two categories because of the dollar: majors and crosses. The USD is a component of any significant pair. As a result, a massive no-no.

Traders can prevent Forex volatility around crucial economic events only by dividing the pairs in such a simple way. Trading cross pairs during American Forex news, for example, is one strategy to avoid large fluctuations in the trading account.

The USD became the backbone of the global financial system after the Bretton Woods conference. Furthermore, in the 1970s, the Nixon shock decoupled it from the gold standard.

It was only a matter of trust in the USD from then on that kept foreign investors buying it. When it comes to building foreign exchange reserves, the USD is still the most popular option.

This is a huge advantage that the USD has, and other countries lust after it.

 

The most important News in Forex Trading in the United States

The Forex calendar news from the United States is one of the most active. Because of the dollar’s importance, the state of the US economy affects every market.

Furthermore, the dollar’s intermarket correlation indicates that it will affect not only the Forex market but also other markets such as bonds, stocks, and options. As a result, it’s all about deciphering economic news.

It’s all about the interest rate level for a currency. As a result, the dollar moves in response to the Federal Reserve’s interest rate announcements and news conferences.

And then there’s the Forex market. Every six weeks, the Federal Reserve meets. The Fed releases the FOMC (Federal Open Market Committee) Statement on Wednesdays, just after London closes. This is a text that explains monetary policy.

A news conference follows the FOMC announcement once per quarter, or every two sessions. The Federal Reserve has never raised or lowered the federal funds rate without first holding a press conference.

As a result, the federal funds rate level is THE Forex news to keep an eye on. As a general rule, the stronger the dollar grows as the interest rate rises.

During the Fed presser, the Forex market becomes quite volatile. Questions are asked by journalists from all across the world. The Chairman/Chairwoman then responds.

No one has any idea what the questions are. Nobody knows what the response will be, either. As a result, the USD exhibits huge fluctuations throughout the charts. It effectively triggers stops for both longs and shorts.

 

Inflation or CPI to mark in Forex Calendar News

Inflation is a measure of how much the price of goods and services has changed over time. Inflation, often known as the Consumer Price Index (CPI), is published on a monthly basis.

It’s one of the most closely followed Forex stories. If the CPI deviates from the objective, the market experiences significant Forex volatility. Traders are aware that the Federal Reserve keeps a close eye on inflation.

The Fed has set a two percent CPI objective as part of its mandate. It does not, however, consider the standard CPI. Instead, the Core CPI is taken into account. Alternatively, inflation without the prices of transportation, energy, and food.

When inflation falls, the currency depreciates, according to conventional wisdom. When inflation falls, there is a growing anticipation that the Fed will loosen monetary policy.

Alternatively, it may reduce rates.

Because there is a time difference between the two Forex news releases, traders react immediately. Trading is, after all, a game of expectations.

Inflation does not “damage” the charts as it does when the Fed adjusts rates as a Forex volatility indicator. If the rate deviates significantly, however, Forex volatility rises as traders anticipate a reaction from the Fed.

 

What is mean Trading at High Frequency?

Knowing the players is an important part of comprehending how the basic analysis Forex market works. Who is to blame for a currency pair’s rapid surges or dips?

Retail Forex traders account for less than 6% of the market. Big commercial banks, Forex brokers, liquidity providers, investment funds, and other financial institutions make up the rest.

The trading sector has changed dramatically during the previous few decades. High-Frequency Trading became one of the most prominent sectors as a result of technological advancements (HFT).

Algorithmic trading is referred to as HFT. Thousands of times per second, supercomputers or trading algorithms purchase and sell a currency or currency pair.

These robots trade based on the Forex calendar news. They purchase and sell depending on the difference between the current and predicted value of the economic calendar Forex news.

These robots trade based on the Forex calendar news
(Source: Forexboat)

In the blink of an eye, you can buy or sell something. This is why the stock market is so volatile. This happens in less than a second after the FX news from the economic calendar is released.

The chart above is only one illustration of how a fundamental analysis method in Forex might function. While the presidential elections in the United States and the first round of the French elections were tough to decipher, the Federal Reserve’s rate hike was not.

Adjusting your positions to the central banks’ monetary policy produces the best Forex fundamental analysis. After learning Forex fundamental analysis, traders instead of following a technical trend follow a fundamental one.

 

Inflation and the ECB

Everyone knows that the ECB is having trouble controlling inflation in the Eurozone these days. More precisely, with its absence. Normal inflation should be approximately 2%, according to the ECB’s mandate.

In this relationship, a stable economic growth rate of 1.8 percent or 2.2 percent suffices. Inflationary pressures force the central bank to raise interest rates.

Lower inflation, on the other hand, causes the central bank to cut rates. Higher rates indicate a stronger currency, whereas lower rates indicate a weaker currency.

It is now evident why central banks care so much about inflation
(Source: Forexboat)

It is now evident why central banks care so much about inflation. As a result, it is one of the most essential fundamental analytical indicators in the Forex market.

Inflation in the Eurozone surprisingly fell towards the end of October 2013. The predicted or forecasted value, according to the economic calendar, was 1.4 percent.

However, the real figure was 0.8 percent. Please review the mandate of a central bank before proceeding: to keep inflation below or near to 2%. The ECB’s mandate did not allow for such a release. As a result, market participants began selling the Euro in a frenzy. Why?

Because trading expectations is an element of the basic study of the Forex market. In this situation, expectations grew that the central bank would decrease rates at its next meeting based on inflation data.

Cutting rates is negative for a currency, thus sellers enter the market. As the graph above demonstrates, they succeeded.

The next ECB meeting was two weeks away, and speculators sold the Euro in anticipation of a rate drop. The economic calendar Forex has an impact on trading decisions in this way.

For the next two weeks, all Euro pairs on the dashboard experienced losses. No longer did the news section of any economic calendar matter.

The ECB delivered on its promises. The central bank slashed the interest rate, and the EURUSD plummeted by 200 pips in a matter of minutes.

The lows of that day, however, proved to be the lows for a long time to come. The reason for this comes from a press conference.

A press conference follows forty-five minutes after every ECB meeting
(Source: Forexboat)

Every ECB meeting is followed by a 45-minute news conference. Press representatives question the President after he reads the remarks.

The ECB President (Mario Draghi) endorsed the rate drop during the news conference. He did say, though, that the ECB expects inflation to rise next year.

 

If you are looking to find a suitable forex broker, be sure to read the following guides:

10 Best Forex Brokers That Give The Most Value To Traders

9 Best Forex Brokers That Are Recommended For Day Trading

9 Best Forex Brokers That Are Recommended For Scalping

My reviews about the best forex brokers in the world that offer the most value and facilities to traders.

Read About:

IRONFX Review                                      BLACKBULL MARKETS Review
XM Review                                               PUPRIME Review
INSTAFOREX Review                             TRADEVIEW MARKETS Review
VANTAGE Review                                   SUPERFOREX Review
INFINOX Review                                    AVATRADE Review
EIGHTCAP Review

 

Final words

As a result of that communication, traders’ attention was drawn once more to expectations. That turned out to be the EURUSD pair’s low point for a long time to come.

It didn’t matter that the US NFP came in stronger than expected the next day. So, the dollar is on the rise. Traders just ignored the data, and the pre-ECB highs vanished without a trace. Fundamental analysis in Forex is really powerful.

So you get the the actual data refreshed in your browser, All right, so that’s how the Forex Factory Calendar works, feel free to submit comments below, if you like this tutorial click on the share buttons and sharing this tutorial with your friends, for more tutorials on Forex Trading until next time.

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