Do you know by spending one minute or less in a day, you can actually become a consistently successful day trader?
If you are a beginner trader or investor who hasn’t have much experience in day trading or stock investment then by giving few minutes of your day you can actually trade like a professional trader. All you have to do is to meet your best friend at least for a minute on daily basis.
And by a best friend, we mean an economic calendar.
It is a real-time calendar which shows the scheduled financial events, major & minor announcements, and releases of data related to financial and economic markets. The data include Consumer Price Index (CPI), Wholesale Price Index (WPI), Gross Domestic Product (GDP), Non-Farm Payrolls, Interest Rate Decisions, and much more.
There are other much more events which released after a certain period of time. It could be on weekly basis, monthly basis, or yearly basis. These events are listed in the economic calendar along with the scheduled releasing time.
Risk Caused by High Impact Data & Releases
In the economic calendar, each event is mentioned and graded – depending upon the economic calendar one use. The events graded in minimal market impact from the maximal market impact. For example, minimal market impact marked as “Low” and maximal market impact indicated as “High” marking.
The events impact or volatility marked with colors like high impact event will be marked as red. These events are the ones you must be aware of.
Many forex traders who trade in currency market use the economic calendar to follow the crucial economic indicators to predict the market movement and future inflation. Traders know these events cause volatility which they may fell victim for or already did.
This is why day trader or swing trader need to spend few minutes in the morning in order to get informed decisions based on the info collected from economic calendar.
How to Minimize Risks with the Economic Calendar?
If you are a trader who invested in the stock market, you must be aware of risks involved in each and every single trade. You can trade in stock with a tight bid/ask spread and noteworthy liquidity at each price level to absorb orders. So, stating the obvious but your stop-loss order will get you out of the trade at the price you expect.
But, when a high impact data released, though, things can drastically change. You may face the chances of failure in meeting a deadline, which is when you get a worse price than you expected on an order.
This is the reason why the economic calendar is so important for anybody who invested or trading in the financial market. Because of this unpredictability – we can’t be so sure of what major announcement or economic event will be revealed.
This is why many professional traders avoid taking new trades until after the data has been released. After getting the latest information on crucial indicators and trending announcements, the economic calendar can help in scheduling risks and to avoid.
Final Thoughts: -
Economic Calendar tells the status of the economy of a country in terms of strengths and weaknesses. So, it is important for traders and investors to use the economic calendar to make informed decisions.
One more thing!
An economic calendar is not limited to the traders and investors but also useful for commodity analysts, technical & research analysts, speculators, hedgers, and equity analysts.