It’s important to know how to read a well-designed economic calendar. This calendar is used by many financial institutions and brokerage firms. Each day on the calendar a certain currency is expected to have a high probability of increasing in value relative to another currency.
It’s important to understand that the economic calendar has no direct correlation with price movements. The economic calendar is a representation of short-term economic and monetary factors.
As a buyer, you will need to study the economic calendar for trends and tendencies which indicate potential buyers. You’ll need to compare this calendar with what your own internal economic calendars are telling you.
In order to successfully trade with currency pairs which are moving against each other, you’ll need to study the change in the expected value of the two currencies during the calendar week. This means you’ll need to make sure your own calendar is always moving in the same direction as the currency pair you’re trading against.
It is often the case that the economic calendar can be effectively manipulated by a broker or financial institution. They can use any of a number of technical or mechanical strategies which result in such manipulation of the economic calendar.
One way of manipulating the economic calendar is by using a strategy allows the trader to identify market information which tends to confirm his or her current position. For example, if a currency pair is expected to increase in value by two percent over the next week, a trader can exploit this information by following a strategy which trades according to this expectation.
A second effective strategy is a currency charting system. This allows the trader to make use of the full extent of economic and price information to make a successful trading decision.
It is possible to apply the use of these two strategies on longer term and longer short term time frames. A simple currency charting system allows the trader to make the most of the economic calendar.
The currency markets operate on a worldwide basis, meaning that the economic calendar is essentially meaningless from a Canadian perspective. However, the economic calendar does still provide information which is relevant for Canadian traders.
Canadian traders should be aware that the economic calendar is one of the many measures that are used to help determine what the federal government will spend its money on. If the federal government decides to increase spending on infrastructure projects in Canada, this would occur on a certain day.
The economic calendar can therefore be a powerful tool for financial advisors who trade in the currency markets. They can use it to identify when to enter and exit a particular trade.
The economic calendar is a powerful, but very difficult and risky financial forecasting tool. It is best suited for experienced traders who understand the limitations of the economic calendar.