How to use an economic calendar for stock trading
Efficiency on the stock exchange directly depends on the ability to analyze; the analytical mind is one of the main qualities of a trader.
First of all, a trader must not only understand certain processes that occur with a certain currency instrument, stock or futures, but also be able to track, find and sort huge amounts of data that are relevant and can affect the movement of quotes.
However, few traders can boast of the ability to make any forecasts based on analytical data.
Fundamental market analysis has managed to give rise to so many myths that beginners, as soon as they hear a phrase about news, begin to avoid them like fire, not to mention subjugating certain patterns that they cause.
Economic calendar presents a selection of the main news for certain countries, which relate to all sectors of the economy without exception.
Economically, a calendar is not just a list of news with the date of its release, but a truly professional tool, which no professional player on the stock exchange can do without.
Information carried by the economic calendar
The economic calendar for stock trading clearly indicates the time and date of publication of news, sorts by the strength of influence on the market, and also indicates current, previous and potential values relative to certain statistics.
In the economic calendar you can find a variety of news, ranging from macroeconomics and key indicators like GDP, various indices and ending with speeches and statements of the heads of Central Banks with a clear time of their speech.
All news in the calendar can be sorted by degree of influence, by certain countries, which allows you to very quickly outline an action plan in the event of the release of positive or negative data on certain statistics.
Almost all beginners avoid using fundamental analysis because of its complexity; they do not even realize that before each of them there is an explanation in the calendar that speaks of the importance of the news and how the price may behave if the forecast comes true .
Thus, the economic calendar on Forex acts as a cheat sheet, thanks to which you can always adequately respond to a given situation without being an expert in the field of economics. To see the meaning of the news, you just need to click on its title, and the strength of the news is indicated by special symbols with three dots.
Practical application of the economic calendar
Traders, as a rule, are divided into three categories, namely those who trade on news, who take news into account only for the sake of stopping trading at a period incomprehensible to them, and also those who do not care about news.
If you belong to the latter category, then most likely this article is not interesting to you.
In practice, the algorithm of actions is simple and is divided into several stages: Stage 1.
A selection of news for the day that may have an impact on the market. At this stage, news is selected specifically for the countries of those currency pairs for which you will trade.
For example, if you trade EUR/USD, then you should be interested in data on the economies of America and the European Union. After identifying the countries, it is necessary to filter out minor weak news and select information with two to three tags.
Stage 2.
Introduction to the characteristics of the news. In order to find out what this or that news means, you need to click on its name, where clear information and options for how a trader should react to certain data will be indicated.
Stage 3.
Developing a clear algorithm After you have become acquainted with the news and know its clear release time, you should pay attention to the forecast and actual value.
At the moment the actual value is released, you should clearly know how you will act, namely buy or sell, and not fuss around searching for information. Remember!
A timely reaction to news is the main requirement for fundamental analysis trading. In conclusion, I would like to note that the economic calendar for stock trading is an indispensable tool that is not used only out of stupidity or prejudices, which are inspired by typical myths about fundamental analysis .