How to use forex factory free trading tools
Forex Factory found on the forexfactory.com domain name is one of the best known resources và a famously reliable forex calendar on the web for trading the news. This is a guide to lớn news trading.
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6How lớn use the Forex Factory economic calendar
Forex traders, especially day traders (discover more about day trading) use Forex Factory khổng lồ keep up to lớn date with the news that moves the forex market. Fortunately, Forex Factory collects all the upcoming economic data, aggregate forex market data, and major news events and put them into an economic forex news calendar. The Forex Factory calendar is especially important in an example like the below when there is a FOMC meeting, major news event or any other big economic news announcements lượt thích non-farm payrolls (NFP).
The forex factory news calendar, a highly active forex forum, looks as follows:
There are 10 columns in the forex news calendar. Here we highlight the important ones
Currency: The currency code for the forex pairs most likely to be affected
Impact: How likely this data thành quả is lớn cause a big move in the forex market. This is where you will get lightning fast forex news.
Detail: will give you some more information about how this data thành tích works.
Actual: The data when it is released is shown here
Forecast: What the consensus forecast is from economics polled by Reuters or Bloomberg. You can know how market participants are reacting to certain data releases here and use past performance lớn gauge future results and market moves.
Previous: What the result was in the previous release, normally the previous month
Graph: This shows you how the data has moved over time & is useful lớn see the trend
Apart from these features, the calendar also allows you khổng lồ change the time zone to lớn your local time.
How to trade with the Forex Factor economic calendar
The next step is trading the forex market for professional forex traders using the economic calendar. To bởi this we need to lớn understand how economic data can impact the forex market. Using the news khổng lồ trade forex is called fundamental analysis.
To learn more, try reading our blog What is fundamental analysis?
However, a deep understanding of what each data point means or an ability to vì economic forecasting is unnecessary for forex trading success by trading the news. This type of trading strategy is known as ‘forex news trading’.
News trading using Forex Factory
News trading involves buy or selling a forex pair the moment news comes out. The economic calendar on Forex Factory is a useful tool for seeing when the news arrives.
Bearing in mind the Forex Factory calendar is không tính tiền to use so there can sometimes be a lag. A Bloomberg Terminal would almost certainly deliver the news quicker, but it costs thousands of dollars per month, something most retail traders cannot afford. If there is a lag, use an alternative news source as a backup option or if the currency price has already moved, then skip the trade.
How lớn trade the news
Forex traders compare the actual data result with the forecast as well as the previous reading. All else being equal the economic news should affect the currency as follows….
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Let’s take an example from the previous economic calendar:
Here, Canada (CAD) CPI has seen a shock decline from the previous month as well as missed the forecast. I.e. The 0.5% Actual is lower than the Forecast of 0.7% and the Previous of 0.6%.
Forex Factory ranked this as a high impact news event. The result of this data should be lớn send CAD lower.
To trade the Canadian dollar we trade the major forex pair USD/CAD.
So if the CAD is expected to weaken, we buy USD and sell CAD. I.e. We buy USD/CAD.
News tab on Forex Factory
Of course, forex trading is not as simple as the above example and extra precautions should be taken. For example, Forex Factory also has one of the most popular places to lớn find economic news and financial market news on the internet.
Before trading the news, the forex trader might bởi vì well to lớn read market analysis about the Canada CPI data release before it comes out. This can be found on the ‘News’ tab on Forex Factory.
In this example, ING bank produced an article previewing the economic data release. Other features can also be useful supplementary information such as the Forex Factory sentiment indicator.
News trading strategy using Forex Factory
Certain risk management parameters should also be decided before the example trade in USD/CAD. This can be done with a price chart lượt thích those available on the webchiase.vn trading platform. Và of course, this is not exclusive to lớn one forex pair. GBP/USD would be affected by GBP announcements & EUR/USD affected by EUR announcements etc - and all will be affected by USD announcements such as US GDP data.
USD/CAD price chart (1-minute timeframe)
Here the trader can use some basic technical analysis of tư vấn and resistance khổng lồ pre-determine entry & exit point for the trade before the news is released.
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Required information for the trade:
Trading Strategy:The News is released at 14:30News article on Forex Factory suggests a miss is possible so prepare buy (long) entryTrade entry will be a market order based on the 1-minute candlestick at 14:30Trade Entry & Exit levels:The stop loss could be set underneath the two recent lows on the candle chartThe take profit order can be at the recent highTrading DecisionWait for news lớn be releasedIf the data misses as expected, place the market orderIf the data comes in line or beats, no tradeHow lớn start news trading with forex
Trading the news is a basic trading strategy that is accessible to lớn beginner traders as well as experienced traders but time & practice is needed to get it right. A demo trading trương mục provides the perfect venue lớn practice such a trading strategy before trading live.
Chuyên mục: Tài chính
