The Forex Factory Calendar is a powerful tool for traders who want to stay informed about upcoming economic events that could impact the forex market. Whether you’re a beginner or an experienced trader, understanding how to use this calendar can help you make more informed trading decisions. In this guide, I’ll walk you through the steps to effectively use the Forex Factory Calendar and explain how it can be an essential part of your trading strategy.
Step 1: Access the Forex Factory Calendar
To get started, you need to access the Forex Factory Calendar. You can do this by checking our signup/login full Forex Factory guide. The calendar is displayed prominently on the homepage, but you can also navigate to it by clicking on the “Calendar” tab at the top of the page.
Step 2: Adjust the Time Zone
The Forex Factory Calendar allows you to adjust the time zone to match your local time. This is crucial because it helps you avoid any confusion about when specific events are happening. To change the time zone:
- Click on the clock icon at the top of the calendar page.
- Select your local time zone from the dropdown menu.
- Click “Save Settings” to apply the changes.
Now, all the events on the calendar will be displayed in your local time.
Step 3: Filter the Events
The Forex Factory Calendar lists a wide range of economic events from around the world. However, not all events are equally important, and some may not affect the currency pairs you’re trading. To make the calendar more relevant to your needs, you can filter the events based on currency and impact level:
- Click on the “Filter” icon on the top-right corner of the calendar.
- Select the currencies you’re interested in (e.g., USD, EUR, GBP).
- Choose the impact level: low, medium, or high. High-impact events usually have the most significant effect on the market.
- Click “Apply Filter” to update the calendar.
Step 4: Understand the Event Details
Each event on the Forex Factory Calendar has several columns of information:
- Time: When the event is scheduled to occur.
- Currency: The currency likely to be affected by the event.
- Impact: A color-coded indicator (yellow for low, orange for medium, red for high) showing the expected impact on the market.
- Event: The name of the event (e.g., Non-Farm Payrolls, CPI, GDP).
- Actual/Forecast/Previous: These columns show the actual data (released at the event time), the forecasted data (expected outcome), and the previous data (last period’s outcome).
Step 5: Analyze the Data
Once an event occurs, the “Actual” column will be updated with the newly released data. This is where you can compare the actual outcome with the forecasted data to gauge the event’s potential impact on the market. Here’s how traders typically analyze this information:
- If the actual result is better than the forecast: This is usually positive for the currency, and it may cause the currency to strengthen.
- If the actual result is worse than the forecast: This is typically negative for the currency, and it may cause the currency to weaken.
For example, if the U.S. Non-Farm Payrolls (NFP) report shows that 300,000 jobs were added last month (higher than the forecast of 250,000), you might expect the USD to strengthen as a result.
Step 6: Use the Forex Factory Calendar in Your Trading Strategy
The Forex Factory Calendar isn’t just about keeping track of events; it’s about integrating this information into your trading strategy. Here’s how you can do that:
- Avoid Trading During Major Events: Many traders choose to avoid entering trades just before high-impact events like central bank meetings or major economic reports. The market can become highly volatile, making it difficult to predict price movements.
- Plan Trades Around the Events: Some traders use the calendar to plan trades based on the expected outcome of an event. For example, if you expect a positive GDP report from the UK, you might enter a long position on GBP/USD before the event.
- Use It for News Trading: News traders specifically trade around these events, trying to capitalize on the immediate market reaction. This strategy requires quick decision-making and a deep understanding of how different types of news affect the market.
Example of Using the Forex Factory Calendar
Let’s say you’re trading the EUR/USD pair, and you notice that the European Central Bank (ECB) is scheduled to release its interest rate decision. This is a high-impact event, as changes in interest rates can significantly influence currency values.
Before the event, you might see that the forecast is for the ECB to keep rates unchanged. However, if the actual result is an unexpected rate cut, this could cause the euro to drop sharply against the dollar. Knowing this, you might decide to short EUR/USD or, if you prefer less risk, simply stay out of the market until the event passes.
Why the Forex Factory Calendar is Important
The Forex Factory Calendar is crucial because it provides real-time updates on economic events that can move the market. By staying informed, you can avoid unexpected volatility and make more informed trading decisions. Other traders use this calendar to time their trades, manage risk, and stay ahead of market trends.
It also gives you the chance to see other categories such as metals, energy or Crypto. If you select the Crypto option in the calendar view it redirects you to cryptocraft where you can see the upcoming important news for Crypto.
The Forex Factory App
In addition to the web version, Forex Factory also offers an app for both iOS and Android. The app has all the features of the desktop version, including real-time updates, customizable filters, and time zone adjustments. It’s perfect for traders who want to stay informed while on the go.
Conclusion
The Forex Factory Calendar is an essential tool for anyone serious about forex trading. By following the steps outlined in this guide, you can use the calendar to track important economic events, analyze market conditions, and integrate this information into your trading strategy. Whether you’re a beginner or an experienced trader, the Forex Factory Calendar can help you stay ahead of the game and make more informed trading decisions.
