The main purpose of studying economic calendar is to understand the financial releases that are scheduled and what effect can they have on the trader’s forex trade. The releases that drive the forex market are retail price index, GDP, interest rate exchanges, balance of payments, inflation, employment and unemployment figures etc. The market prices are affected with each piece of fundamental information that is released and above all how the market traders react to it. This may lead to volatile prices.

 The traders make a very big mistake when they try and look at the releases very closely. A much effective strategy is by trying to gauge how the forex market traders react to the information provided to them. And this is known as the market sentiment. The main advantage is that the economic calendars not only provide the time and the nature of the release but also provide with previous figures and the figures that are expected in the market this time.

 The economic calendar mentioned serves very significant and common information of economic conditions that affect the prices and also the trends in the forex market. It also facilitates study of specific commentary for each of the releases. It is usually seen that the traders tend to omit this economic study while selecting forex platforms and selecting trading strategies. But they later realize that they have made a very big mistake as they face losses in their trading.

 You should not be trading when you know that the economic news is going to release. It is advisable not to trade at least three to four hours before the releases. Let’s understand by an example:   if there is going to be any announcement with regards to interest rates for EUR then you should not be dealing in currency pairs like EUR/USD, EUR/CHF, and AUD/USD etc. this will help you from incurring a heavy loss in the trade that is carried out in the forex market.

 The forex calendar will always keep you updated on what is happening around in the forex market. Thus it is very important that you keep a look on the economic calendar at least a few times in a day and also include it into your forex trading strategy or plans that you make. In short, whatever be your trading routine it is important that you include the study of the economic calendar in your routine.

Economic calendar can serve you with very significant and common information about economic conditions like non-farm pay roll, interest rate announcement, unemployment rates, consumer price index, manufacturing PMI, retail sales and many more. This information is very important for your dealings in forex market.

In case you are adopting technical analysis in your forex strategy and not involving economic events then you do not realize at initial stage but you are omitting a major part of the financial world. So even though you are using technical analysis you need to consider this fundamental analysis in your forex market plan.

 Let’s take an example for better understanding, you have a forex strategy that is working well for you and that it is capable of gaining good returns, however the strategy does not include variability of the market. This will not enable you to know about instable market and when such situations come you will not be aware of it. Therefore if you keep a tab on economic calendar, you will be able to be known to the economic environment and during instability also it will benefit you.

If you are aware of the timing of economic news releases, you should not be trading for two to three hours before any data is release as it is related to the currency pairs. For instance at the time when there is an announcement made regarding the interest rates for US, then you must not incline to trade in pairs such as EUR/USD, USD/CHF, AUD/USD etc. This will protect you from facing the loss.

You will not be aware of what is happening around or when it is going to happen without forex calendar and would not be able to act when required.  Therefore it is very essential that you have a look at this economic calendar for few times in a day and include it in your forex trading plan.

It is very obvious that you as a trader would like to take home much out of the trading account and so for that it is good if you start checking forex calendar for your forex trading.