A better way to deal with news when you are trading is to not be afraid of it. News can be very scary when you are trading. In Forex trading the price does not often change by chance. There is usually something behind a jump or a sudden change in the Forex price. Therefore the Forex Factory economic calendar is a useful free tool that traders use to keep track of market changes. In this guide you will learn how to read the Forex Factory economic calendar and use it to analyze and trade.
What Is the Forex Factory Economic Calendar?
The Forex Factory economic calendar is, like a list of things that are happening around the world that can affect how much money is worth. It shows you something like GDP releases and Central bank speeches.
Why the Forex Factory Economic Calendar Is Crucial for Forex Traders?
Ignoring what is going on with the economy is one of the mistakes people make when they are trading. The calendar really helps you with the news. It tells you what is happening and when. Use Forex Factory economic calendar to:
- Align technical strategies with fundamentals
- Manage risk more effectively
- Anticipate volatility instead of reacting emotionally
- Avoid unnecessary losses during unpredictable news spikes
- Prepare precise entry, exit, and risk-management plans
- Trade with confidence rather than uncertainty
Step-by-Step Guide to Interpreting the Forex Factory Economic Calendar
This deeper insight helps traders evaluate potential market reactions more accurately.
Correctly interpreting the Forex Factory calendar enables traders to figure out the reason behind market moves rather than just detecting the time when the moves happen. A single calendar entry consists of several pieces of data that collectively can indicate expected price action.
Identify High Impact Events
Forex Factory identifies the importance of news and events by a colour code system:
- Red = High
- Orange = Medium
- Yellow = Low
High impact events tend to create significant changes within seconds to minutes in the marketplace.
Identify Only Currency Pairs Associated with the News
Not every news event will affect all currency pairs. By filtering out irrelevant events you will be able to concentrate on trades that you are interested in.
Compare Actual Results to Forecasted Results and Past Results
This is where you will begin to see your true understanding of the economic calendar. If economic results are better than what was predicted, this typically will lead to currency strengthening.
If economic results are lower than what was predicted, this typically will lead to currency weakening. The forex market responds to surprises, not merely to what is contained in the news articles.
Choosing the Forex Factory Calendar Events to Watch
Economic events are not all the same. Trying to keep track of everything that happens can be really confusing, for traders and make it hard for them to concentrate. The thing to do is to pick the events that have actually made the market move in a big way in the past. Experienced traders mostly focus on below things:
- Making money from the trades they do
- High-impact (red) events
- Major economic Forex indicators
When is the Best Time to Use Forex Factory Economic Calendar for Trading?
Timing is really important when you are trading Forex. The Forex Factory economic calendar is very useful. You have to use it at the right time. A lot of people make a mistake by looking at the calendar after the market has already changed.
The calendar is actually very helpful when you use it every day to plan what you will do. It helps you to be careful and not take many risks. You can also use the calendar to make a plan that works with what’s happening in the market.
You can get a lot out of Forex Factory if you use it correctly and use Forex Factory when you need to.
Before trade session:
- Identify high impact news
- Decide to trade or do not trade
- Adjust your stop loss and position size
During news releases:
- Scalper trade volatility (very risky)
- Conservative traders will look for confirmation before making trades
After news releases:
- Trade in the direction of the news trends.
- Watch for pullbacks after the initial spikes.
Step by Step Guide to Using the Forex Factory Economic Calendar
Reading the Forex Factory calendar properly is key to grasping not only the timing of market movements but also their reasons. Each event on the calendar contains several pieces of information that together can indicate the likely direction of the price.
The most valuable information comes from measuring the forecast and previous values against the actual one after the release. A release that is quite unexpected usually brings about some major market moves.
On the other hand, traders need to see which way the price is going after the release because the initial move may not be the one that lasts the most.
Navigate to the Forex Factory Calendar
To see a full list of economic events, visit the calendar section of the Forex Factory web page. With this look at the things to come in the market, traders can get an idea of when volatility may be especially high for that day or week.
Configure Your Time Zone
It is important to make sure you have set the right time zone in order to avoid confusion. If the calendar time is synced to one’s local time or trading platform time, significant announcements will not surprise you.
Set the Forex Factory Calendar Event Filter
Filters enable traders to adjust the calendar to their preferences by:
- Picking specific currencies
- Choose impact levels
- Ignoring events of minor relevance
This step helps one get clearer and more efficient results. Select your desired and check the Forex Factory economic event details.
News Trading Strategies Using Forex Factory Economic Calender
The Forex market can be really affected by news. This kind of news can cause fast changes in prices. When you trade based on news without a good plan you can make decisions based on emotions and end up losing money. Below are three top trading strategies in the Forex market effective for news trading.
Avoid-Volatility Strategy (Risk-Averse Traders)
Some good ways to make money do not involve buying and selling things on the market. For a lot of people who trade. People who are just starting out or people who buy things and hold onto them for a long time.
The best thing to do when big news comes out is to make sure their money is safe. This is what people call capital preservation of their trading money. This plan is about staying from big changes, in the market that can hurt you instead of trying to make money from those changes.
The strategy is to avoid the ups and downs of high-impact volatility and just focus on being safe. Before red-impact news (such as NFP, CPI, or interest rate decisions), traders:
- Close open positions
- Avoid opening new trades
- Reduce position sizes or tighten stop-loss levels
Breakout Strategy (Advanced Traders)
The breakout Forex strategy is for people who trade and want to make money from price changes that happen when there is surprising news. You have to be good at trading and make choices when you use the breakout strategy.
Sometimes you get breakouts which are fake breakouts. This strategy carries higher risk but also higher reward potential when executed correctly.
So, before a high-impact event:
- Identify key support and resistance levels
- Place pending buy stop and sell stop orders above and below the range
- Use tight stop-loss and predefined take-profit levels
Post-News Trend Strategy
The post-news trend strategy is one of the ways to trade news-related movements so traders use this strategy and wait for the market to show them which way it is going. Patience after news often pays better than speed during news. After the news release:
- Observe the initial price reaction
- Wait for volatility to stabilize
- Identify a clear directional bias
- Avoid emotional decisions
- Trade with confirmed momentum
- Reduce the impact of fake spikes
Tips to Master Forex Factory Economic Calendar Like a Professional
Professional traders use the Forex Factory economic calendar to plan. They do not just look at it when something is about to happen. The Forex Factory calendar becomes something that gives you an edge.
Here are some tips that will help you use the Forex Factory calendar like professional traders do:
- Set alerts for high-impact news
- Trade smaller lot sizes during news
- Always use stop-loss orders
- Keep a news-trading journal
- Backtest news strategies before live trading
Risk Management in Using Forex Factory Economic Calendar
High leverage at the time of major announcements raises the risk of slippage and very fast price reversals. Master traders usually lower their leverage or trade fewer volumes around red, impact events.
To conclude, emotional discipline is extremely important. News trading can make one get scared of missing out or panic alarmed to exit the market. By sticking to their preset trading plan and not exceeding the risk they are willing to take, traders can turn the Forex Factory schedule into a tool that keeps them aware of risks rather than a means of making impulsive decisions.
Forex Factory Economic Calendar vs Other Economic Calendars
The Forex Factory economic calendar is the best because it is easy to use and very fast. Lets check out Forex factory economic calendar differences and other economic calendars:
| Features | Forex Factory economic calendar | Other economic calendars |
|---|---|---|
| Real-time updates | Always | Sometimes |
| Impact filtering | Unlimited | Limited |
| Community insight | Available | Unavailable |
| Free access | Possible | Not always |
Common Mistakes in Using Forex Factory Economic Calendar
Trading with the Forex Factory economic calendar; incorrectly, is often the reason traders lose their capital, trade on emotions and have inconsistent performance. Many times, the failure to adequately prepare for the data prior to releasing or interpreting the data, provides enough of a foundation to allow traders to rely solely on economic news data.
Awareness of the most frequent economic calendar trading errors can protect your trading capital, help you make better trading decisions and enhance your overall ability to trade consistently with increased confidence and discipline. Some of these mistakes include:
- Failing to check the calendars prior to entering a trade on economic data.
- Trading with excessive risk (leverage) on economic news data.
- Interpreting forecasted economic data inaccurately.
- Trading every red economic report without a specific strategy on how to trade it.
- News data increases both poor decisions and great profits.
Use the Forex Factory Economic Calendar with STP Trading
When you are buying and selling around the time of news the quality of the trade is very important. This valid and well experienced broker gives you:
- Fast order execution with minimal slippage and free signals
- Deep liquidity for volatile markets based on real time analysis
- Real tight spreads even when there is news happening with the stocks or currencies and providing services like anti call margin or hedge in the negative margin
- Advanced trading platforms for analysis and trade like meta trader 5
- Transparent STP model with no dealing desk or different trading accounts
By combining the Forex Factory economic calendar with STP Trading’s professional trading environment, you gain better control during high-impact market moments.
Trade With Purpose & Not Emotion by Forex Factory Economic Calendar
Forex Factory’s economic calendar is more than just an event calendar, when applied properly it provides a trader with a tactical edge, assisting them in avoiding excessive risk, maximising volatility and providing clarity for their trades rather than emotional decision-making.
Want to enhance your trading performance with actual market data? Establish an account at STP Trading and become part of our exchange trading community; where we enable you to execute successful Forex trades with transparency and speed.
FAQ Smart Traders Asked about Forex Factory Economic Calendar
Does the Forex Factory cater for novice traders?
Absolutely, particularly novice traders looking to comprehend how and why the markets react to various events as opposed to simply understanding what happens within the Forex markets.
Can I solely use the economic calendar to determine my trades?
No, The most successful traders use news in conjunction with technical and fundamental analyses combined with stringent risk management techniques to achieve superior returns.
How many economic events should I consider trading on a weekly basis?
Always focus on quality rather than quantity; the majority of professional traders only trade one to 3 significant events each week.
Will every piece of economic data that comes through as RED always have an effect on the markets?
Not necessarily. In instances where the data posted matches up with the expectations of the marketplace, the price movement, if at all, will not be significant.
