Forex is a market that is constantly affected by real-world events. In order for your trading to be successful, you have to constantly keep up with that news and understand how they influence the market. However, the moment you open a forex news calendar, you’ll see that you have a little problem. There are way too many news releases.
This guide will help you distinguish important news from the fluff and explain how each of them affects the market.
How to Learn Which Economic News to Prioritize
Not all news is equally useful. For example, the new of the United Kingdom leaving the European Union will shake the world, while a report of a new factory opening in Uruguay will barely affect Uruguay itself.
In order to distinguish the important news remember to:
- Check the affected countries. The United States, European Union, and the United Kingdom are the most impactful countries when it comes to news. These countries hold the major Forex currencies and therefore affect more currency pairs than the rest. News from the other countries impacts only their exotic currency pairs.
- Follow the news schedule. There are indices and reports that are released on the regular schedule, for example, the Crude Oil Report in the US. Take a not of how they affect the market and remember to prepare for that news. For example, if the crude oil price begins to rise high, the Canadian Dollar is soon to follow.
- Beware the breaking news. If a big newspiece breaks out without any warning — for example, a coup in a country or an economic disaster — immediately pull out of the market. There is no way to predict how this news will impact the market and everyone not fast enough will end up losing their money.
Using a Forex News Calendar is not as easy as it may seem — but it is not hard either. And when you learn to prioritize the news feed, you will see that there aren’t really that many. Even on an abnormally busy day, you won’t get more than 4 important events per currency pair — and that is more than manageable.