Forex Factory is probably one of the best calendars available to retail traders. The calendar itself identifies all of the economic announcements that are due to be released throughout the month. It helps to determine which announcements will have the most impact on the markets; and what traders are expecting from those announcements.
How Can Forex Factory Make You Money?
1. The first thing is to focus on those announcements that can make a high impact on the markets. These are what will cause moves worth trading.
2. After identifying all of the high impact announcements for the day, the next step is to simply monitor the expected number and how that relates to the released number. It is this possible deviation from expectations that holds all of the potential.
3. The calendar itself gives a handy description of each announcement and how the possible deviations will impact the currency of the country in which the announcement is being made.
4. Next, you need to determine what the expected effect on the price will be, should the number come out better or worse than expectations. If for example, the number is better than expectations, then traders will want to buy more of that currency and if the news is worse than expectations, traders will be looking to sell it.
5. Once you see the news and you have your deviations you will then have a very good idea about the short term sentiment for that currency, and can look for trading set-ups that correspond with that sentiment.
6. If the news brings a bullish sentiment, make sure that the next signal you take is a long trade. And vice versa for bearish sentiment.
6 Must Do Tips to Make Your Forex Investing Successful
1. Stick to your guns after you have setup a Forex trading plan. You have worked out a system of goals for your trading, so stick with them.
2. Before you pluck a Forex strategy out of the sky and begin to trade with it, you first need to prove that it works for you. Make sure you try any new strategy or move out on a demo account first.
3. To do well in Forex trading, automate your trading as much as you possibly can. This minimizes the role of emotions in the trading process.
4. Set your emotions aside and be automated in your approach. Follow successful patterns with the same actions that led to that success.
5. More than the stock market, options, or even futures trading, forex is dependent upon economic conditions. Before starting to trade forex, it is important that you have a thorough understanding of trade imbalances, interest rates, current account deficits, and fiscal policy.
6. Make sure that the money you invest is money that you can afford to lose. Forex trading is risky business and everyone takes a loss at some point in time.
Adhering to these simple steps will protect you against false moves and those seemingly random times when the price just blows your trade out for a loss with a sharp move. Deviating news events cause most of these ‘random’ moves. That is why keeping a close eye on them can pay off.