News moves markets – plain and simple.
This is especially true in Forex, which is ultra sensitive to the plethora of daily economic releases and reports around the world. How does a day trader keep track of all this data without being overwhelmed? A tool that we use frequently in our currency day trading is the Forex Calendar from Forex Factory.
The calendar gives you the date and time of each economic release, the currency it might impact, and the consensus forecast. It also provides the result of the previous release and the actual value of the release after it comes out. One of the coolest features of the Forex Calendar is that it color-codes each release based on the probable impact it will have on the given currency: yellow for “low” impact, orange for “medium,” and red for “high.” A currency trader can quickly look at the economic schedule for a particular day and gauge the level of activity that might occur; for example, a day with a lot of red icons (releases) will probably be a lot more active than a day with only low-impact reports (yellow icons). A Forex day trader will also be able to see at what times of the day the market might be the most volatile.
While it is not necessarily true that more high-impact days will make you more money, the more chaotic the market is, the more opportunities there are. Let me know if the Forex Calendar becomes a useful addition to your day trading arsenal.
